Are Kids Worse Off Today? Interesting Economics of What the Minimum Wage Will Buy

Folks are often surprised when I tell them that today's young people have a really bright future. It turns out that they also have a really bright present. Mark Perry at the fabulous Carpe Diem blog has put together this comparison, based on earlier work by W. Michael Cox. (If you're not reading Mark's blog regularly, add to your list.)

In 1952, the minimum wage was $0.75 per hour (equivalent to $6.39 in today's dollars), and a full-time summer job at 40 hours per week for 12 weeks would have generated $360 in total summer earnings (ignoring taxes). Using retail prices from a 1952 Sears Christmas Catalog, I found that a teenager then would have only been able to purchase the following 3 items with his or her entire pre-tax summer earnings of $360 working at the minimum wage (with $15 borrowed from the parents to cover the full $375 cost):

Items Purchased in 1952 with Summer Wages @ $0.75 hour
Royal Deluxe Portable Typewriter $120
Silvertone Portable Phonograph $65
Silvertone 17-inch TV $190
Total $375

Now compare that to the items in the table below that could be purchased by a teenager or college student this year with his or her summer earnings of $3,480 (ignoring taxes) at the current minimum wage of $7.25 per hour:

Items Purchased in 2011 with Summer Wages @ $7.25 hour
Dell Inspiron Laptop $450
Apple iPod Touch $210
Apple iPhone 4G $200
Garmin GPS $100
Canon 14.1 Megapixel Digital Camera $120
HP Officejet Wireless Printer $100
Westinghouse 32 inch LCD HDTV $330
Sharp 3D Wi-Fi Ready Blu-Ray Player $200
Samsung 5.1-Channel Blu-ray Home Theater System $260
Sonicare Rechargable Power Toothbrush $110
Sony PlayStation 3 $400
Sony Clock Radio with Apple iPhone and iPod Dock $40
TiVo Premiere HD DVR – 45 hours $149
XM OnyX Sirius XM Satellite Radio Tuner $47
De'Longhi EC702 Espresso Machine $150
Kindle $114
Apple iPad $500