In his latest interview with Tom Woods on the minimum wage here https://tomwoods.com/ep-1864-gene-epstein-on-more-bad-arguments-for-the-minimum-wage Gene Epstein opposes a minimum wage hike with faulty accounting to imply there is no problem.
Epstein claims that 1.1 percent of workers work at or below the federal minimum wage in 2021 versus 7.9 percent in 1979 and acts as if this is a drop-dead argument that they are better off. If Tom Woods were a moderately competent economist, he'd have asked if Epstein's conclusion really follows from his data, given what Austrian Economists know about inflation.
Let's compare Federal Minimum Wage between 1979 and 2021:
FMW 1979: $2.90
FMW 2021: $7.25
Per BLS CPI data, the CPI-adjusted FMW in 2021 (Jan-Jan) would be $11.11. A 53% increase. Epstein crowing over fewer FMW workers as a sign of 'capitalism's success' is already rendered meaningless in that light.
Further, a good Misesean knows that the CPI isn't inflationl; inflation is the increase in the money supply by fiat. Knowing this, let's compare the increase in the money supply versus the increase in the 'piece of the pie' that the low-wage earner gets.
FMW 1979-2021: $7.25/$2.90 = 250%
CPI-FMW 1979-2021: $11.11/$2.90 = 383%
M2 Money Supply: $19368T/1379T = 1404%
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Minimum wage by True Inflation: $40.72
Remember all that newly printed money is the stuff that's either sitting in someone's account or sloshing around the economy. If there hadn't occurred a massive shift in income and wealth we'd expect a 14x increase in the money supply to be reflected in the form of a $41 minimum wage.
But it's not. This is evidence of redistribution to the rich.
Then there's the reported earnings. If as Epstein claims only 1.1% of workers earn the minimum wage or less ($14,500/year) that would translate to 1.9 million out of the 169 million wage earners reported by the Social Security administration's most recent data.
https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2019
But how many wage earners report under $15,000 per annum? Hmm 44 million. Not 1.9 million. 44 million. That's 23 times higher than the number Epstein suggests.
Now, let's compare median net worth, shall we?
median net worth 1979: $75,143
median net worth 2020: $121,411
median net worth 2020: $1,055,008, if the moneyprinting had been equitable
For the median US citizen's net worth to track the creation of M2 money it would have to be $1,055,008 in 2020.
Given that excess income above necessary expenditure increases greater than 1:1 over raw income, the average middle-of-the-road american's net wealth could be FAR over a million dollars, if all that newly printed money hadn't mostly gone to the parasite class, Mister Epstein.
Epsteins 'there's no scam, nothing to see here kids!' position can be easily smashed with hard Austrian facts.
...just not by Tom Woods.
Yes, the minimum wage doesn't solve the problems, but Epstein pretends there isn't a problem.
A picture helps tell the story: http://0x0.st/-bi_.webp
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