The idea of an honest day's work for an honest day's pay, or a living wage, is one of the primary ethics behind a fair wage structure necessary to build a prosperous, sustainable middle class. However, trends suggest while those at the upper end of the income range have done very well in recent years, data suggest those in the lower and middle range are losing economic ground.

Consumer price index (inflation) rose 0.40%

Average hourly earnings rose 0.01%

Factor by which inflation rate exceeded increase in average wages: 40.

And therein lies the problem: when inflation exceeds growth in wages, wage earners lose purchasing power and get squeezed, and for many workers, prospects of earning a living wage grow dim.

Again, thinking along the traditions of our Native American leaders, that is, looking seven generations out, what are the long-term consequences of this trend?

Over the past twenty years or so, the minimum wage has fallen over 30%. The "inflation calculator" link below is a tool we can use to look at the influence of inflation on wages over time.

In 1981, the minimum wage was $3.35.

The current minimum wage is $5.15 per hour. If the minimum wage established for 1981 had been adjusted for inflation, it would now be $7.65 per hour. By not keeping up with inflation, the MINIMUM WAGE HAS DECLINED 33% since 1981, calculated as follows:

Let's be quite clear about what this means in terms of current policy. Those who oppose an increase in the minimum wage do not want it to stay unchanged. They want it to continue to fall. Unless the minimum wage has cost of living adjustments, it effectively declines because of inflation.

To find out what a living wage is for your town or a town you might want to move to, follow the "living wage calculator" link. If you are planning to start a family, note the effect of children on the living wage estimate!

What are the long-term consequences of a falling minimum wage? What are the implications of a growing class of working poor? The graph linked below shows the change in income for each quintile of household income from 1967 to 2001. Each quintile represents 20-percent of the households. If all the household incomes were ranked from lowest to highest, then Quintile 1 (Q1) would be the lowest 20-percent, Quintile 2 (Q2) would be the moderately low 20-percent, Quintile 3 (Q3) would be the middle 20-percent, Quintile 4 (Q4 would be the moderately high 20-percent, and Quintile 5 (Q5) would be the highest 20-percent.

The plots for each quintile represent the mean income for that particular quintile for a given year. Note that Q5 has experienced steady growth while Q1 has remained essentially flat. While it is true that as a worker progresses through their career, they may join higher quintile groups before falling back at retirement, the graph demonstrates that a higher proportion of the national income has shifted to those in the top quintile, Q5.

The U.S. Department of Labor Census Bureau lumps the income distribution into fifths, which masks or moderates the numbers at the highest and lowest quintiles, Q1 and Q5. David Chandler has produced an interesting graphic he calls the "L-Curve" which demonstrates the extreme wealth of the top one percent earners compared to all others. The graph, linked below, is interactive and invites the viewer to zoom in and out of the graph to fully visualize the very large numbers at the high end of the L-Curve, where the wealthiest Americans live. You might take a look at this, I can't find anything wrong with the statistics.

Keywords: living wage, global economy, economic vitality, inflation, minimum wage, consumer price index, fair trade, shrinking middle class

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