At a Bare Minimum, Increase the Minimum Wage!

The current federal minimum is $7.25 per hour. Oh, pleeeze.

The Fair Standards in Labor Act was adopted in 1938.

Ever since -- eighty-three years, to be precise -- the minimum wage has been enshrined in federal law. (1)

From time to time (infrequently, I daresay), Congress has increased the wage.

Whenever a proposal to raise it comes up for consideration, opponents shriek of dire consequences. “It’ll hurt the economy! It will actually cause job cuts! We’ll have to increase prices! Businesses will have to close. The ranks of the unemployed will swell! The cost of living will rise! Inflation will spike!” Etc., etc.

To the best of my knowledge, the economy never has been brought to its knees by a minimum wage increase. And as far as I can tell, increases in the minimum have not yet resulted in the ruination of the republic, either.

But don’t accept this premise based solely upon my mumbling and grumbling. Economists have conclusively demonstrated that it just ain’t so.

The Nobel Prize for Economics was awarded yesterday (October 10, 2021).

David Card, one of the three laureates, was recognized for his 1993 work with Alan B. Krueger in studying the minimum wage.

They examined two states: New Jersey (where the minimum wage in fast food establishments was raised) and adjoining Pennsylvania, where the wage was held at a constant.

Their conclusion (twenty-eight years ago, mind you): “We find no indication that the rise in the minimum wage reduced employment.” (2)

So may we now dispense (finally) with all of the sky-is-falling shibboleths?

That said -- let’s discuss the status of the federal minimum wage.

The present federal wage: $7.25 per hour. (Try living on that!)

“The current $7.25 national minimum wage, for instance, is now worth 16% less than when it was enacted in July 2009.” (3)

Fortunately, state and local governments across the nation have provided some mitigation (on a patchwork basis, of course) and have stepped in with their own minimums.

The U.S. Department of Labor has published a state-by-state table of them. (4)

The University of California at Berkeley (yes, Dr. Card’s school) has provided a listing of counties and and municipalities. (5)

So whither the U.S. Congress?

This past January, the Raise the Wage Act of 2021 was introduced in the House. (6) That’s constructive, right?

A comparable bill has been introduced in the Senate. (7)

In February, the Congressional Budget Office released a report on the proposed legislation: “The Budgetary Effects of the Raise the Wage Act of 2021”. (8)

Count me grim and glum about current prospects, however. Legislation like this introduced in years past has made little progress.

So where do we stand?

In a word – stalled.

My fond hope is that someday, the federal minimum wage will comport with the living wage.

And I hope that we will be able to skip the histrionics and set it to rise automatically, based on either median wages (my preferred method) or the inflation index.

All that hard working Americans want – and deserve – is a fair shake.

Together, we shall forever strive for exactly that.

Sources:

(1) 29 USC Section 203, et seq. https://www.law.cornell.edu/uscode/text/29/203

(2) https://davidcard.berkeley.edu/papers/njmin-aer.pdf

(3) https://www.bloomberg.com/graphics/2019-minimum-wage-increase-inflation/

(4) https://www.dol.gov/agencies/whd/mw-consolidated

(5) https://laborcenter.berkeley.edu/inventory-of-us-city-and-county-minimum-wage-ordinances/

(6) https://www.congress.gov/bill/117th-congress/house-bill/603

(7) https://www.congress.gov/bill/117th-congress/senate-bill/53

(8) https://www.cbo.gov/system/files/2021-02/56975-Minimum-Wage.pdf