The Truth-O-Meter Says:
Reed

In the 1950s and 1960s, "the minimum wage was such that it would lift you out of poverty."

Jack Reed on Thursday, May 1st, 2014 in a speech on the floor of the U.S. Senate

Jack Reed says the minimum wage of the 1950s and 1960s would lift a person out of poverty

In the battle to raise the federal minimum wage, proponents have been arguing that the minimum wage now buys far less than it has in the past, and is no longer high enough to lift someone out of poverty.

During a May 1 speech on the floor of the U.S. Senate, Jack Reed (D-RI) offered a version of that argument.

"The federal minimum wage has not been increased since 2009 and today an individual who works 40 hours per week, 52 weeks a year, at the federal minimum wage earns $15,080 per year, and that is nearly $5,000 below the federal poverty level for a family of three, and almost $9,000 below the poverty level for a family of four," he said.

"People who work hard for a living shouldn't have to live in poverty, and that was not the case in the ‘50s and the ‘60s when the minimum wage was such that it would lift you out of poverty," Reed said. "And I think that's what we have to do today."

Reed supports a proposal to raise the minimum wage to $10.10, which would bring a family of three above the poverty threshold.

For this fact check, we are going to examine whether the minimum wage was really high enough in the 1950s and 1960s to pull people out of poverty.

We asked Reed's spokesman for the source of his statistic. While we waited for a response, we looked on our own.

For historical minimum wage data, we went to the U.S. Department of Labor. During the time period Reed was talking about, the minimum rose six times, starting at 40 cents per hour and eventually reaching $1.60.

How much did it take to lift someone out of poverty during that era? That's a much harder question to answer, and it depends on the size of the family, something Reed wasn't specific about.

The federal poverty level, the adequacy of which is still the subject of debate, wasn't developed until the early 1960s, so it wasn't even in existence during the start of the time period Reed was talking about.

The first "poverty threshold," in 1963, was about $3,100 for a family of four.

Someone earning the minimum wage that year would have earned $2,460, enough for a family of three but not a family of four, according to the "Social Welfare and the Economy" page on the Social Security Administration's Office of Retirement and Disability Policy website.

Those data only go back to 1959. We used a cost of living calculator from the Bureau of Labor Statistics to get a rough idea of living costs from 1950 through 1958.

According to our calculations, throughout the 1950s and 1960s, the minimum wage was high enough to keep an individual above the poverty level

The first time it was enough to push a two-person family above the poverty level was in 1956, when it jumped to $1 an hour.

But throughout the 1950s and 1960s, in most years, the minimum wage couldn’t lift a family of three out of poverty and was never enough for a family of four.

When we shared our information with Reed's office, they provided information that confirmed our findings.

Reed spokesman Chip Unruh said the senator’s statement about the minimum wage and poverty levels in the ‘50s and ‘60s is accurate.

"I think it is very clear that Reed is talking about his perception that hard work used to get you a livable wage," he said. "The federal poverty rate as measured today didn't always exist as a unit of measurement, but that doesn't mean poverty itself didn't exist . . . Reed referenced families earlier in his speech, but he also was referencing individuals."

Our ruling

Sen. Jack Reed, lobbying for an increase in the minimum wage, said that in the 1950s and 1960s, "the minimum wage was such that it would lift you out of poverty."

We found that during that period, the minimum wage always generated enough income to keep an individual out of poverty.

But when it comes to making enough money to support a family -- and Reed made several references to families -- that wasn't always true during those two decades.

Based on federal data, the minimum wage didn't become high enough to support a two-person family until about 1956 and it wasn't consistently high enough to lift a family of three until 1967. It never covered a family of four, regarded as a typical family size in that era.

One might assume that Reed was talking about families, but the statement we're checking isn't specific. Because that statement is accurate but needs clarification or additional information, we rate it Mostly True.

(If you have a claim you’d like PolitiFact Rhode Island to check, email us at politifact@providencejournal.com. And follow us on Twitter: @politifactri.)

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About this statement:

Published: Sunday, June 15th, 2014 at 12:01 a.m.

Subjects: Economy, History, Income, Poverty, Welfare

Sources:

YouTube.com, "Reed Urges Senate Colleagues to Support Increase in the Minimum Wage," May 2, 2014

Emails, Chip Unruh, spokesman, U.S. Sen. Jack Reed, May 9, 21 and 24, 2014

DOL.gov, "History of Federal Minimum Wage Rates Under the Fair Labor Standards Act, 1938 - 2009," United States Department of Labor, undated, accessed May 20, 2014

SSA.gov, "Annual Statistical Supplement, 2013 - Social Welfare and the Economy," Table 3.E1: "Weighted average poverty thresholds for nonfarm families, by size, 1959–2012 (in dollars)," U.S. Social Security Administration Office of Retirement and Disability Policy, accessed May 16, 2014, and "The Development and History of the Poverty Thresholds," from the Social Security Bulletin, 1992, accessed May 23, 2014

PolitiFact.com, "Pro-Democrat group says 9 of the 10 poorest states are Republican," March 28, 2014, and "Are there more people living in poverty now than there were 50 years ago?" Oct. 24, 2013

BLS.gov, "CPI Inflation Calculator," U.S. Department of Labor Bureau of Labor Statistics, May 21, 2014

OCPP.org, "How We Measure Poverty," Oregon Center for Public Policy, February 2000, accessed May 20, 2014

NOTES:

* At the start of 1950, the minimum was 40 cents per hour. It rose to 75 cents on Jan. 25, 1950, then to $1 on March 1, 1956. It rose again to $1.15 in 1961, to $1.25 in 1963 and to $1.40 in 1967, finally reaching $1.60 on Feb. 1, 1968.

* There are actually two federal measures of poverty: the poverty threshold which is a precise number used for research purposes and the federal poverty guidelines, which are adjusted at the end of each year to determine eligibility for federal programs. The two are usually close. For this fact check, we used the threshold.

* Another detailed look at how the poverty threshold was developed can be found at http://www.ocpp.org/poverty/how/

* There have been several types of minimum wage over the years. For this fact check, we used the highest.

Written by: C. Eugene Emery Jr.
Researched by: C. Eugene Emery Jr.
Edited by: Tim Murphy

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