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 problem is raising the minimum wage actually hurts, not helps, low-income workers. Minimum wage laws make it illegal to have a job that pays below the government mandated limit. If that wage is more than a job provider will pay for a certain job, then no worker can get—or keep—that job.
The proposal is couched in the soothing and smarmy rhetoric of leftist populism….But if that's all it takes, why stop there? If a simple legislative act increasing the minimum wage to $7.75 is all that is needed to improve the lot of the working poor by just a little, then why not raise it to $10 an hour and get them to the poverty level? For that matter, why not raise it to $50 an hour, assuring every working Californian a comfortable living?
Wage mandates ignore the principals of free market economies; they prevent businesses from making profits, growing and hiring more workers; and they base wages on what the worker wants instead of on the value of work performed.
The minimum wage has caused more misery and unemployment than anything since the Great Depression.
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.
