Real income has gone down but prices have gone up - math error?

Factual Questions
21

No, just less of it.

22

Can you prove that? It’s easy to say but proving it is something else entirely.

23

I agree. Especially since the minimum wage is not the only wage workers make, and some move up to higher wages each year.

24

I am not saying the minimum wage ISN’T too low, or that inequality is not a problem. Wages for most people (including those on minimum wage) HAVEN’T kept up with the cost of living. But that .67-vs-.21 number does not show that. It’s a simple maths error.

25

To put this in mathematical terms as politics seem to be getting into it. This was about the maths not the politics.

We have four numbers:

Wa - Wages at time A, e.g. 1990
Wb - Wages* at time B, e.g. 2015
Ca - Cost of living at time A
Cb - Cost of living at time B

The numbers are presented like this:
Wb = 1.21Wa
Cb = 1.67Ca

This says that the C increased 3x or more than W. This is WRONG. The actual numbers for the increase of W is (the minimum wage is 2x what it was in 1990):
Wb = 2.0Wa
Cb = 1.67Ca

But we know that dollars are worth less at time B than at A (hence the * above) so we that value (call it Dab) into our equation to get our 1.21 figure:
Wb = 1.21DabWa
Cb = 1.67*Ca

So actually that 1.21->1.67 is not all that meaningful. There is another value (Dab) in there we are not considering. Especially as we’ve expect that Dab is related to the ratio Ca/Cb.

26

The post to which I responded said “all wages”.

An increase in the minimum wage probably won’t affect inflation very much, because [ul][li]Only about 4% of the US work force makes minimum wage[/li][li]Most of those who do aren’t supporting a family (or themselves)[/li][li]Either an increase in the MW will bring them up to what wage levels are set by the market, which will have little effect because they will tend to be making more than the federal MW already, or it will exceed that wage level, in which case it will increase unemployment by amounts that will tend to offset the increased spending by those still employed.[/li][/ul]Increasing minimum wage is to Democrats what tax cuts are to Republicans - the idea is “free money”. Unfortunately, TANSTAAFL.

Regards,
Shodan