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. 

Since inflation records have been kept only since around 1914, we have to guess a bit. Calculated from 1914, a dollar is now $27.00. So let's pull a number out of the air, that in the 71 years since A Christmas Carol was written to 1914 that inflation doubles the number. This assumes that there was anything like inflation in the 19th century, which is a big assumption. So Cratchit makes maybe $54.00 per day in today's dollars, which is $6.75/hr.

This means the fundamental premise of the meme is false. 

But it gets worse. First, the tautology: Most Americans on minimum wage earn less than a Dickensian allegory for destitution. A person who earns minimum wage by definition earns less than someone who makes more. But it isn't "most Americans." Every American who makes minimum wage makes minimum wage, not "most Americans."

Ok, so if we grant for a moment that Cratchit actually made the equivalent of $13.50/hr, he was still doing worse than someone making minimum wage today. In 1843 there was no British universal healthcare, no welfare, food stamps, subsidies, or government housing. There were no highways, shopping malls, or cell phones. There was no government-guaranteed retirement income, no hospitals, and no such thing as vacations, airplanes, or TV, let alone the internet or an electrical grid.

But for the meme writer, Bob Cratchit was better off. Not.

But let's keep going. How many people make $7.25/hr, or less?

According to the Bureau of Labor Statistics (BLS) 1.6 million workers, or 1.9% of all hourly paid, non-self-employed workers, earned wages at or below the federal minimum wage in 2019.

We're not talking about a lot of people. 

We also need to consider who makes minimum wage. The age distribution is 

So almost half are young people, likely not heads of households or sole wage earners, and probably are in their first job, earn minimum wage. Another 3 percent are retirees, who certainly are not relying solely on minimum wage, since they have Social Security. Further, we don't know how many are full-time vs. part time employed, or who might be holding more than one job, or who are living with parents or other family, or perhaps are college students.

Our conclusion is that on more than one level the meme is deceptive or just plain wrong.