Minimum Wage
The minimum wage is a critical social economic safeguard, setting a wage floor that should allow workers to meet their basic needs. The national minimum wage was first instituted in 1938 as a central feature of the Fair Labor Standards Act (FLSA). The Act also established overtime and child labor standards. It has been amended many times to increase the wage or expand coverage. Workers in some industries, such as agriculture, are exempt. The minimum wage is set by Congress, not by an independent agency as President Franklin Roosevelt originally proposed. It is not pegged to the cost of living and the real value of the federal minimum wage lags behind inflation. As a result, many states and cities have set their minimum wage rates higher than the federally mandated wage.
Commentary
Cry Wolf Quotes
[The Fair Labor Standards Act] will destroy small industry….[these ideas are] the product of those whose thinking is rooted in an alien philosophy and who are bent upon the destruction of our whole constitutional system and the setting up of a red-labor communistic despotism upon the ruins of our Christian civilization.
We don’t think the government ought to be in the business of setting wages.
Under these inflationary pressures many of the industries and small businesses employing marginally trained or unskilled workers will be forced to cut back on the number of those employees or go out of business. The very worker that the Federal minimum wage was intended to aid will find himself out of work.
If raising the minimum wage to $12 or $15 per hour will raise the standard of living for the working poor, why stop there? Why not raise the standard of living for the middle class as well by increasing the minimum wage to, say, $25 an hour? If we raised it to $100 an hour, we could have the best standard of living in history!
Related Laws and Rules
Evidence
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States with Minimum Wages above the Federal Level have had Faster Small Business and Retail Job Growth
The authors decisively disprove the argument that the minimum wage takes a particularly cruel toll on small businesses, which frequently employ low-wage workers (and operate on thin profit margins).
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The Wage and Employment Impact of Minimum-Wage Laws in Three Cities
The Economic Policy Research analyzes the effects of minimum wage increases in Santa Fe, San Francisco and Washington D.C., in comparison with their surrounding suburbs and nearby urban centers that didn’t experience similar wage hikes.
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The Minimum Wage Merry-Go-Round
Ezra Klein neatly dismantles the usual conservative arguments against the minimum wage.
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Making Work Pay: The Impact of the 1996-97 Minimum Wage Increase
The Economic Policy Institute study shows that the Clinton-era minimum wage increases mostly supported the wages of low-income adults.
Backgrounders & Briefs
Good Rules: Ten Stories Of Successful Regulation
Demos looks at ten laws and rules that we take for granted.
Minimum Wage Policy Brief
By Professor Stephanie Luce
The idea of minimum wage laws has been around for more than a century. They are still a good idea.
Resources
Raise the Minimum Wage is a project of the National Employment Law Project. The effort is devoted to preserving the wage floor by raising the federal minimum wage.
University of California-Berkeley Labor Center carries out research on labor and workplace-related issues.
The National Employment Law Project is an organization that promotes economically just public policy in the face of the prevailing trends of the law several decades.
