[1] https://upload.wikimedia.org/wikipedia/commons/thumb/3/30/Ti...
Apparently (based on the comment I was replying to), labcomputer does seem to think the maximum is an outlier, and that this false generality applies here.
Visually, 1968 sure looks like an outlier to me: https://fred.stlouisfed.org/graph/?g=EZn4
But let's check my intuition. The federal minimum wage was raised 10 times from 1960 through 1980. The raises have the following indexed values:
* 1961: 137
* 1963: 145
* 1967: 151
* 1968: 167
* 1974: 146
* 1975: 143
* 1976: 147
* 1978: 150
* 1979: 151
* 1980: 141
So mean = 148, st.dev = 8.1. That puts 1968 at 2.4 standard deviations above the mean.
If you just want to make the pedantic point that the maximum is not in general an outlier, we are in agreement. But, in this particular case, the maximum is clearly an outlier.
Furthermore, I think the data still supports janandonly's point (though not quite as starkly) even if we throw out the maximum.
It would indeed be pedantic of me to now make an issue of the maximum not in general being an outlier, but at the time I wrote that, I was replying to a post in which the only justification given for considering 1968 to be an outlier was the fact that it was the maximum.
When productivity increased, minimum wage earners do make more.
Overall productivity increases don't increase profits. They reduce prices! Workers make more because everything costs less.
If you increased minimum wage with productivity, it would eclipse the highest earners in a matter of decades. It makes no sense to do that.
That only applies in an economy without credit and where sales are constrained by the spending of the wage share. In an economy with credit you can use financialisation to give people spending power their wages don't permit, which keeps prices higher than they would otherwise be and allows more to flow to the profit share.
The dynamics then drives the path of interest rates down over the years until you get a credit crunch - at which point the lack of spending from the profit share suddenly shows up in a Minsky Moment.
There's an inductive connection between the monetary economy and the real economy, not a direct one. It works more like an iPhone charger than a 1 bar electric fire, and that means you need greater monetary 'apparent power' to get the maximum level of real economy 'true power'.
No such thing as a free lunch. You can't just inflate a persons worth without having to pay for it somehow.
y'know, even out the playing field a millimeter or two.
We can sit around making up what-if hypothetical tropes till the cows come home, and nothing will change. The rich at the very top just get richer.
The point is to see past your own pile of coin and think about society as a whole. If people were up for sacrificing that second holiday house and their stupid expensive watch or whatever, so much good would come of it.
Inequality fuels crime , public services like trains suffer etc...
I think ‘giving money to free loaders’ is a bit of a straw man, as the second order effects benefit everyone. Including you. And note I’m not advocating communism.
If productivity is driven by industries with no minimum wage workers, why would the benefit of that productivity pass to them?