The guest editorial in the Saturday, Aug. 31, edition of the Daily Times written by The Philadelphia Enquirer in support of "investing" in the country's economic well-being by increasing wages is an illustration of economic ignorance.
The editorial cites a 75 percent increase in American worker productivity over the period 1979-2012, and only a 5 percent increase in "real" income. The implication is that employers have ripped off the working class by pocketing all the profits that such a disparity must provide.
What the editorial doesn't state, however, is that over the same period of time, the Consumer Price Index increased 236 percent! The editorial also doesn't explain that the term "real" used in reporting income means that it has been adjusted for inflation. So, our American workers' income not only kept up with the outrageous inflation that has been foisted upon us by our government's fiscal policies over the years, combined with wage increases without commensurate productivity increases, but has actually outpaced the cost of living. Given that, where's the complaint?
The editorial mentions a KFC cashier who makes $7.75 an hour and hasn't had a raise since 2007. What has she been doing to improve her lot since she took that job eight years ago? Expecting an employer to pay higher wages simply because prices have increased is wishful thinking. Employers have to have productivity improvement in order to increase wages, or they must otherwise increase the cost of their product, thus contributing to a further increase in the cost of living.
Here's a simple test of the editorial's plea for "investing" by increasing wages so that wage-earners presumably would have more money to spend and stimulate the economy: set the minimum wage at $20 per hour, which equates to $40,000 per year. What do you think would happen?