Santa’s Advice to Labor Department: Check Your Math Twice

The beloved holiday movie A Christmas Story was co-opted this week by the Department of Labor to argue that the minimum wage is worth 20% less than it was in November 1983 when the film was released. But the Department’s number-crunchers should have should followed Santa’s lead in checking their math twice before tweeting this out.

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You can check the Labor Department’s claim using its own data from the Consumer Price Index (CPI). A Christmas Story was released in November 1983, when the federal minimum wage was $3.35. In today’s dollars, that’s the equivalent of roughly $7.85. That means the current federal minimum wage of $7.25 is worth approximately seven percent less than the 1983 minimum wage–not 20 percent less, as the Labor Department claims.

We’ve explained previously why harkening back to a particular year is a misleading way to argue for a higher minimum wage. After all, why not pick 1990 as the reference year, when Kevin McCallister was famously left Home Alone? Today’s minimum wage is worth seven percent more than it was that year.

Rather than cherry-picking a base year to fit a particular argument–and, even worse, getting your facts wrong in the process–why not opt for better-targeted and less-harmful approaches to reduce poverty?