Inflation is a big problem these days. Prices are rising for everything from bacon to rent to hotel rooms. And while the Federal Reserve announced aggressive measures to curb costs last week, not all economists believe this is the best approach for helping working people.
One thing is clear: Rising wages aren’t responsible for recent inflation. In fact, wage growth has actually lagged behind inflation rates, dampening upward pressure on prices. We are also currently on the heels of decades in which worker productivity has increased while pay has failed to keep up. Corporate policies, meanwhile, have played a far greater role than wages in causing today’s inflation: Companies’ profits have soared, raising questions about where profits end and price gouging begins.
Amid this troubling economic scenario, there’s one thing that hasn’t gone up: the federal minimum wage. In terms of what it can buy, it’s actually deflated. The last increase was on July 24, 2009, to the paltry rate of $7.25 per hour.
