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Great Graphic: US Minimum Wage


Charts on the relationship between earnings and poverty.

Here is a Great Graphic from David Ruccio at Real-World Economics Review Blog. It captures the fact that in real (inflation adjusted) terms, the US minimum wage is lower than it was 45 years ago. The pie charts show that earning minimum wage does not prevent one from being impoverished. Indeed, the gap between the two has grown considerably.

The problem is not simply about minimum wage and poverty. Its is about aggregate demand more generally. It is not clear where it will come from. Wage growth is hardly keeping pace with inflation. There is political pressure to reduce transfer payments. Credit had filled the gap, but for numerous reasons, cannot be relied on going forward.

See more from Marc Chandler at his blog Marc to Market.

Twitter: @marcmakingsense
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