April 18, 2016 The solid wall between the 1% and the working poor in the USA: The perverse and persisting conundrum of the minimum wage © Enrique Woll Battistini 2016 From September 1969 through December 1973 I was a student at the Tulane School of Engineering, in the EE Program, and at the Tulane Graduate School of Business Administration, in the MBA Program. At that time the minimum wage in Luisiana was not very attractive to a foreign student and stood at USD 3.50 an hour, which I surmise would amount to USD 15.36 today, 43 years later, if adjusted only for inflation at 3.5% P.A. If inflation had averaged 4.5 % over this time span, it would amount to USD 23.23. If the GDP per capita growth of the USA1 from 1973, when GDP per capita was roughly USD 24,000, in 2015 dollars, through 2015, when GDP per capita was roughly USD 48,000, were taken into account as an index of the increase of the general well being over these years, at 1.67% P.A., and thus as an indicator of real growth of wages for a fair distribution of such increase of wealth, the minimum wage today would be USD 25.73 if the inflation adjustment were 3.5% P.A. and USD 38.90 if the inflation adjustment were 4.5% P.A. Note that the cumulative inflation in the USA2 from 1912 to 1973 was 44 and from 1912 to 2015 was 237, representing an average inflation rate of 4.00% P.A. from 1973 to 2015. Thus, today's fair minimum wage -adjusted for inflation and economic growth from 1973 through 2015- should be some USD 32.32. This, provided that the Luisiana minimum wage in 1973, of USD 3.50, had actually been a fair minimum wage for the whole country. A fair minimum wage of USD 32.32 would yield a full employment annual income of USD 67,225.60, not considering any overtime, which of course would follow given the nature of the employment under consideration. This level of income, compared to, say, USD 20,800.00 per year at USD 10.00 an hour, with no overtime pay, in today's American minimum wage empire, which has enslaved the working class, would seem unreasonable, even absurd to many in the unwitting middle class, and, according to the prevailing attitude, insane to most leaders in the corporate world. However, this misperception, and mistaken attitude, should dissipate, and resolve, if the unwitting and willing parties to this perverse and persistent conundrum would duly and 1https://en.wikipedia.org/wiki/Economy_of_the_United_States 2http://www.usinflationcalculator.com/inflation/consumer-price-index-and- annual-percent-changes-from-1913-to-2008 responsibly consider the fact that the prevailing national income distribution is extremely skewed in favor of the 1%, and to a lesser, but a very real and very significant extent, in favor of the 10%, and so on, to the monumental and unacceptable detriment of the working class and the middle class, especially their children. This starkly unfair state of affairs clearly responds to Thomas Pikkety's thesis3. How to arrive at what may be the smoothest possible national income distribution method that would, in time, make the average national well being in the USA correspond to the suggested fair minimum wage of USD 32.32, and eventually surpass it, and begin to bridge the ominous welfare gap between the rich and the poor in the USA, as well as abroad, by appropriately harnessing national economic resources and international trade, unquestionably must be based on: 1. Enlightened tax reform4. 2. Monotonically increasing productivity per capita resulting from enlightened capital investment5 optimized by effective positive socioeconomic feedback6. 3. The recognition that it is the top national and global governance issue7 that must be resolved in the XXI century, and is inextricably linked to the issue of environmental pollution and anthropogenic climate disruption containment8. *** 3https://www.academia.edu/13062623/Informal_Proof_of_Thomas_Pikettys_Thesis- 2014060802 4https://www.academia.edu/13062837/La_Reforma_Tributaria_del_Siglo_XXI_The_XXI_Cent ury_Tax_Reform_-_2011100411 5https://www.academia.edu/12823841/Mathematical_Model_and_Simulation_for_A_Partnersh ip_for_Development_with_the_United_States_of_America_-_December_1999 6https://www.academia.edu/18040396/Living_in_Peru_- _Uses_and_Limitations_of_Michael_Greene_s_Social_Progress_Index_SPI_for_Development_ -_2015102202 7https://www.academia.edu/23094646/OFA_At_the_Brink_of_Recovery_or_Conflagration_Th e_World_at_a_Tipping_Point_2011111506 8https://www.academia.edu/15092472/Living_in_Peru_- _Peru_in_Copenhagen_Thoughts_on_The_Right_to_Pollute_-_Does_it_Exist_-_2010102701