The reason for these lost wages is simple: The minimum wage is not tied to inflation, which lowers its purchasing power every year. And far too many Congresses and presidents have failed to act to ensure that it increased with inflation since 1968. Today, the federal minimum wage stands at $7.25 per hour. Had it simply kept pace with inflation since 1968, it would be about $10.70 per hour, which would help better pay for necessities of life for workers and their children.
At nearly $300,000 in lost wages since 1968, the average annual wages lost in that time is over $6,500. To make up the total amount of lost wages in the past 45 years, a low-wage worker would need to work for over 13 years even at a $10.50 minimum wage. Lost Wages conservatively estimated that in 2012, with 3.6 million minimum wage workers, the total kept from these hardworking low-wage Americans last year alone was over $15.3 billion. This is cruel and unjust.
So where did these billions of lost wages go? In the 45 years that the minimum wage has lost nearly one third of its value, the compensation of large corporations' CEOs has shot up through the roof, increasing over 900 percent. Large corporations and their executives have been benefiting from and taking advantage of cheap labor and have achieved windfall profits in the past few decades.
The top 100 highest compensated CEOs all made over $15 million last year. That equates to $7,000 per hour. Walmart's CEO, Mike Duke -- one of the largest employers of low-wage workers in this country -- made $11,000 per hour, bringing home $23 million in 2012. And the highest compensated CEO, John Hammergren of McKesson Corp., persuaded his rubber-stamp board of directors to give him $131 million, or $63,000 per hour --$10,000 more in a single hour than the median annualhousehold income in the U.S.
Meanwhile, the annual income of a minimum wage worker working full time is $15,080. This doesn't come close to the poverty line for a family of three. Minimum and low-wage workers are left struggling with ever deeper debts just to afford basic necessities such as food, housing, transportation and healthcare. Individuals and families are working more -- and paying more -- for less, often without health insurance or paid sick leave.