A minimum wage job puts you in the top fifth of the world income distribution

By Michael Munger.

"I have a go-to discussion strategy, for when I teach undergraduate political economy. It is a way of shocking students out of their dogmatic slumbers. I ask three questions; here are the first two:

1. What percentage of workers in the US work at the minimum wage?

2. If you have a job in the US, at the minimum wage, where does that put you in the world income distribution?

I get answers to the first question ranging from 20 percent to 40 percent (the correct answer is fewer than 2 percent); the answers to the second question are usually around 20 percent (the correct answer is above 85 percent). . . . It quickly gets real, real quiet in the auditorium. All through high school the kids have earnestly been told that poverty should be defined in relative terms, and that the US system is cruel to the poor. The fact that a minimum wage job puts you in the top fifth of the world income distribution . . . and that 98 percent of Americans make more than the minimum wage, creates enormous cognitive dissonance."