That assumes that the cost of

living goes up 5% every year...you are assuming the value is 6.5%. In fact, the average inflation rate from

1938-2002 was 4.01% (source: Economic History Services,

http://eh.net/hmit/inflation/inflationq.php). Using that

figure, the minimum wage today should be, according to your argument, less than $4 per hour (I have $3.48,

but it could be 4% more or less than that depending on what year you are calculating it for). The minimum wage is

much higher than that today.