…productivity is a core tenet of a capitalist system that has spurred economic growth in the form of more jobs, consumer choice, and innovation. It’s designed to reward hard work, with paychecks going to those who provide value and profits to leaders who run the most efficient businesses.

Hillary Hoffower

The federal minimum wage, $7.25 per hour since 2009 – the longest period of history without an increase since the minimum wage was established in 1938 under the Fair Labor Standards Act – kept pace with productivity growth from when it was created until 1968. While 62% of Americans support an increase to $15 per hour, even with a raise to $15 per hour, a typical family of four couldn’t afford the basics in any U.S. state.

It makes sense on a very basic level to tie the federal minimum wage to worker productivity — after all, workers should be reimbursed for the value they create for a company, and productivity is a direct measurement of a company’s output in relation to input. But worker productivity has grown three and a half times more than worker pay since 1979 — with productivity up by nearly 60% and median pay up by less than 16%.

Paul Constant

Per economist Dean Baker, the productivity-adjusted minimum wage would be $23 in 2021.

…families would not only be able to afford to live in the communities where they work, they’d also have money to spend — on meals, on clothes and housewares, on their children, on educational and small business opportunities for themselves. That increased demand would be a boon for local businesses, which would have to hire more workers to deal with the influx of customers.

Paul Constant

P.S., if the minimum wage increased at the same pace as CEO pay, the current minimum would be north of $125 per hour.