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.
Cry Wolf Quotes
The minimum wage is kinda like a sacred cow in Washington, with many lawmakers thinking it’s a win/win for low-skill workers. What if those good intentions backfired on the very people they were supposed to help? One school of thought says lowering the minimum wage will actually create more jobs.
The question of the minimum wage goes beyond the immediate problem. It strikes at a basic underpinning of our democratic system. It touches on the ability of individuals to enter freely into contract without coercion and without arbitrary restrictions for mutual profit. Have we so soon forgotten that the American Revolution was fought in part because of such restrictions? Have we forgotten that there is a correlation between a free market economy and the amount of personal freedom enjoyed by the inhabitants of a country? I certainly hope not. What we are accomplishing by setting a minimum wage is restricting the ability of persons to freely contract for their services and, in so doing, effectively limiting their opportunities to achieve economic well-being.
[The Fair Labor Standards Act] would create chaos in business never yet known to us.... It sets an all-time high in crackpot legislation. Let me make it very clear that I am not opposed to the social theory.... No decent American citizen can take exception to this attitude. What I do take exception to is any approach to a solution of this problem which is utterly impractical and in operation would be much more destructive than constructive to the very purposes which it is designed to serve.
A closer look at the unemployment [nearly 10 percent unemployment rate] suggests that minimum wage laws also deserve a big share of the blame….businesses are not charities and that they only create jobs when they think a worker will generate net revenue. Higher minimum wages, needless to say, are especially destructive for people with poor work skills and limited work experience.
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).
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.
The Minimum Wage Merry-Go-Round
Ezra Klein neatly dismantles the usual conservative arguments against the minimum wage.
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
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.