Depoliticising the Federal Minimum Wage

In my last blog post, I discussed the possible benefits of raising the federal minimum wage to 15 an hour. I noted that this is a critical discussion to have, and it is also very complicated. Given the issue’s complexity, many people, politicians, and protestors don’t have a complete picture. Instead, individuals rely on the political or physical benefits the minimum wage discussion brings directly to them rather than fully understanding all sides of the issue. While I am by no means different from these people, I hope that this particular blog post will convince you to look at the federal minimum wage as more than a political hotbed issue but something that should be regulated by economists or a national body and not politicians in Congress. 

Often, the way Americans look at the federal minimum wage is inherently political. Generally, left-leaning states and counties with more available social welfare programs discuss the benefits of the minimum wage: fair wages, less inequality, and more affordable goods. On the other hand, conservative states and politicians often lean into the possible detriments to the U.S. economy, large businesses, and other blue-collar workers. While this is a broad generalization, the trend has some merit (See Map Below).

U.S States for a raise in the minimum wage Illuminated

Have you ever wondered why the minimum wage is such a hotbed political issue? While the answer is probably more complicated than I make it out to be, The issue lies with who has the power to pass minimum wage legislation: Congress. 

When the U.S. adopted the minimum wage in the 1930s, it went along with various policies protecting workers’ rights. 25% of workers were unemployed, and FDR hoped to create an era of “fair competition” in the workforce. FDR and Congress have seen policies like a minimum wage help workers in other countries and hoped to give it a try in the United States. Since 1938, the minimum wage has been raised several times, last in 2007. However, unlike in many other countries, raising the minimum wage still rests in the hands of Congress.

So, how do other countries raise the minimum wage? There needs to be a straightforward way to raise the minimum wage. In France, the minimum wage increases yearly depending on inflation and the average salary of workers. In Portugal, the minimum wage is raised annually by a body of the Prime Minister’s government and union officials. Even inside the U.S., some states calculate the Minimum wage and tie it to inflation through the Consumer Price Index, which measures the price of an average consumer’s bundle of goods over time. When effective minimum wage laws are implemented, minimum wage responds to inflation over time. In France, the Netherlands, the U.K., and Australia, independent bodies form economic policies, and the minimum wage trends up over time, responding to changes in economic forces in the here and now. In the U.S., Congress passes sharp, infrequent increases, and businesses must react accordingly. While there is still more to this puzzle, a clear image seems to be forming: a depoliticized minimum wage is a better one since it can adequately respond to the changes of the day.

Regardless of how you feel about the minimum wage, it is clear that our system does not consider the opinions of workers or economic factors directly. Instead, minimum wage laws are often used to win elections and increase political supporters. Once again, we must look at other countries as we did in the 30s and fix our broken minimum wage system. It doesn’t have to happen overnight, but moving towards a fairer, more economically informed wage is a policy I would buy into any day of the week.

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