Minimum wage is simply not enough

In 1895, New York state legislators decided to improve working conditions in what could be a deadly profession: baking bread. “Bakeries are actually extremely dangerous places to work because flour is such a fine particulate; if it hangs in the air, it can catch fire and the whole room can go up in a sheet of flame.” The legislature passed a law called the Bakeshop Act. It didn’t set a minimum wage, but limited working hours and required bakeries be kept clean. The U.S. Supreme Court ruled the law unconstitutional. The Bakeshop Act, according to the Court, interfered with individuals’ right to enter into a contract. The ruling suggested there was no way the Court would allow anything like a minimum wage.

In 1912, Massachusetts enacted the first law in the United States requiring a minimum wage. But in 1923, in the case of Adkins vs. Children’s Hospital of D.C., the Court ruled that imposing a minimum wage violates employers’ and workers’ “liberty of contract” right under the Fifth Amendment. That invalidated states’ minimum wage laws, limiting them to offering advice to employers who could set their own standards.

Twenty years later, Franklin D. Roosevelt was president. To lift the country out of the Great Depression, he wanted to put money in peoples’ pockets. “If all employers will work together to shorten hours and raise wages, we can put people back to work,” he said. Roosevelt wanted businesses to do this voluntarily. The administration proposed the National Industrial Recovery Act, which Congress passed in 1933, authorizing the president to regulate industry for fair wages and prices that would stimulate economic recovery. The Supreme Court unanimously struck down the law.

But in 1937, the Court upheld the right of Washington state to have a minimum wage. In 1938 FDR pushed the Fair Labor Standards Act through Congress. It introduced the 40-hour work week, established a national minimum wage – 25 cents an hour – and guaranteed time-and-a-half for overtime in certain jobs.

Over the years, the national minimum wage has been increased and amended to cover additional workers, for example, the Equal Pay Act of 1963, which requires equal pay for the same job regardless of gender. At least twenty-nine states and Washington, D.C., mandate minimum wages higher than the federal standard, with eight states automatically increasing wages based on the cost of living.

The Biden administration has proposed an increase in the national minimum wage to $15.00 an hour as part of a Covid relief package. It would rise from $7.25 to $9.50 an hour this year and increase annually until it reaches $15.00 in 2025.

This increase is long overdue; the two longest periods without an increase in the minimum wage have occurred since 1981. The national minimum wage hasn’t changed since it was increased to $7.25 in 2009. If it had kept up with inflation, it would now be about $11.00 an hour. As the wage floor drops below poverty levels, millions of workers find themselves with paychecks above the minimum, but still earning poverty wages. More than 10 million Americans qualify as the “working poor,” including full-time workers, yet still live below the poverty line, $26,500 for a family of four (median income for a family of four in Adams County is $68,500). Nearly half of the 50 million public school children have family incomes so low they’re eligible for free or reduced lunch, up from one-third since 2011.

The raise to $15.00 an hour would increase wages for 27 million workers, including some earning just above the current minimum wage. An analysis of Biden’s proposal by the Congressional Budget Office (CBO) shows it lifting 1.3 million families out of poverty. More than seven million children live in homes whose income would increase if we raised the minimum wage. At $15.00 in 2024, it would no longer be a poverty wage

There are conflicting studies about whether or not it will lead to a loss of jobs. The CBO thinks it would, but other studies found that no job losses, or virtually none, would result from raising the minimum wage. One from the University of California at Berkeley’s Institute for Research on Labor and Employment concluded it “cannot detect significant negative employment effects.” In fact, in 2014, the 13 states that raised their minimum wages added jobs at a faster rate than the states that did not, according to the U.S. Department of Labor.

American taxpayers pay an estimated $250 billion annually in public assistance, including SNAP/food stamps, Medicaid, and subsidized housing for working families; in effect, we are subsidizing businesses large and small that cannot or will not pay living wages. People who work full time do not deserve to live in poverty, and no person should have to work nine to five and five to nine to just get by in the United States. If a business cannot afford to pay a living wage and depends on government assistance to support its workers, it’s not a viable business. As President Roosevelt said, “It seems to me to be equally plain that no business which depends on paying less than living wages to its workers has any right to continue in this country.”

Pew Research Center survey found that two-thirds of Americans support raising the minimum wage to $15.00 an hour; Amazon has been lobbying Congress to increase the minimum wage to $15.00.

Mark Berg is a community activist in Adams County and a proud Liberal. His email address is MABerg175@Comcast.net.