Bob Cratchit and the minimum wage - FB meme **Updated**

 Posted by a liberal FB friend:

Transcript: Time for your annual reminder that, according to A Christmas Carol, Bob Cratchit makes 15 shillings a week. Adjusted for inflation, that's $530.27/wk, $27,574/yr, or $13.50/hr.

Most Americans on minimum wage earn less than a Dickensian allegory for destitution.

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***Update***

A commenter wants to quibble with the inflation calculation. Fine. Whether the number is $13.50, $16.50, or $9.99, the problem is the same. There is no comparison to the wages, employment benefits, and legal environment of present day.

And by the way, if you follow the commenter's link and change the time period to 1960-2021, which is the beginning of the steep uphill climb of inflation, you'll see an average inflation rate of 5.35%. If you change the time period to 1843-1960, the average rate of inflation was 1.47%.

This means that there was very little inflation for quite some time, and then there began a steep increase right around the time when employment benefits ("By the mid-1960s, employer-provided health insurance was almost universal."), OSHA (1971), and the minimum wage (expanded to most workers in 1967).

In other words, the combination of factors means that a contemporary worker at $16.50/hr bears little resemblance to Bob Cratchitt. Contemporary workers are much better off.

***

There are numerous problems with this meme, not the least of which is the inflation calculation.

A British Pound consists of 20 Shillings (an obsolete currency), and the USD to Pound exchange is currently $1.336148. That makes a Shilling worth about 6 1/2 cents. So Bob Cratchit made about a dollar a day. 

If you make $50,000 per year, you pay....

This was posted by a FB friend.

Let's look at the real numbers. Please note that the above post is calculating the allocation of taxes paid for wage earners at a specific level of income, while I am calculating the burden of government for the entire population. Of course, my method makes it even worse for the those who are making these claims.

First claim, that it costs $247.75/yr for defense. Actual budget for defense is $839.9 billion (shown below). With a population of 322.4 million, that works out to about $2605 for every person in the US, per year.

Second claim, $3.98 for FEMA. FEMA's budget request for 2015 is $10.38 billion, which works out to $32 per person, per year. 

Third claim, $22.88 for unemployment insurance. Montana unemployment tax rates are found here on page 16. The average tax rate is 1.92%, which for a $50,000 wage is $960. Federal spending on unemployment insurance was $93 billion in 2012, which equals $288 per person, per year.

Fourth claim, $36.82 for SNAP. Total federal spending for SNAP in 2011 was $78 billion, which is $241 per person, per year.

Fifth claim, $6.96 for welfare. According to the below pie chart, 10% ($390 billion) is spent on welfare, which equals $1209 per person, per year.

Sixth claim, $43.78 for government pensions. From the chart below, that amount is $969.7 billion, which is $3007 per person, per year.

Seventh claim, $235.81 for Medicare. Planned spending for 2015 is $530 billion, which equals
$1645 per person.

For the eighth claim, it's difficult to know what is being measured. I presume it is tax breaks for corporations. We need to note that every tax dollar paid by corporations filter down to the end user, you and I. Taxes are simply another expense included in the price of the products and services you and I purchase. All taxes are paid by people. Nothing is or can be paid by corporations.

One final note. The total planned spending for 2015 is $3.901 trillion. That is $12,100 per person, per year. If the point of the post was to point out how cheap government is and how evil corporations are, well, we can see that this is just not the case.

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GDP: $18,219.4 bln GO: $32,178.5 bln	United States Federal State and Local Government Spending	US CA > Pop: 322.4 million
-5yr -1yr   Fiscal Year 2015 in $ billion   +1yr +4yr

View: people old default radical census programsaltprog COFOG				Fed	Gov. Xfer	State	Local	Total
[+]	Pensions			969.7	0.0	221.2	47.1	1,238.0
[+]	Health Care			1,044.5	-358.1	499.5	146.4	1,332.4
[+]	Education			130.7	-69.3	301.0	692.7	1,055.1
[+]	Defense			839.9	0.0	0.7	-0.1	840.6
[+]	Welfare			385.8	-113.2	142.8	80.5	495.9
[+]	Protection			34.1	-5.1	70.2	165.4	264.6
[+]	Transportation			97.8	-67.0	127.2	162.2	320.2
[+]	General Government			49.7	-4.1	52.9	71.3	169.7
[+]	Other Spending			97.0	-16.3	70.6	326.7	478.1
[+]	Interest			251.9	0.0	50.7	66.9	369.4
[+]	Balance			0.0	0.0	0.0	0.0	0.0
[+]	Total Spending:  Start chart			3,901.0	-633.1	1,536.8	1,759.1	6,563.8
[+]	Federal Deficit			563.6	0.0	0.0	0.0	563.6
[+]	Gross Public Debt			18,713.5	0.0	1,227.7	1,956.2	21,897.3