It’s a fundamental part of the relationship between the employer and the employee, but sometimes it’s an uneven relationship.
And with that in mind, Congress, back in 1938, decided that there had to be a floor on how low that pay can go. They amended the Fair Labor Standards Act and set the first minimum wage at 25 cents an hour.
Assuming a 48-hour week, which was common in the 1930s, that was $12 a week. That wasn’t much, even back then, but it was at least some protection for those at the very bottom of the wage scale.
When I started to work, the minimum wage was $2.20. That was in 1974, and since then it’s incrementally risen to $7.25.
However, that minimum was set 10 years ago and since then it hasn’t moved a bit. That’s in spite of the fact that prices and the cost of living have consistently gone up.
There is a misconception on the part of many about who benefits from the minimum wage. Surely we’re just talking about high school and college kids with part time jobs. Right?
The answer to that question is no. Most people who are paid the minimum wage, nearly 90%, are supporting themselves and more often than not a family.
With one wage earner, working a full year at the minimum wage, and supporting say two children, the family — assuming no days off — is nearly still $5,000 below the poverty level. That’s the world of the working poor, and that’s who the minimum wage is designed to help. It’s not a benefit program, it’s all about work; and at least if not a living wage, it helps keep a lot of people from dropping too far into poverty.
Prospects for increasing the national minimum wage aren’t good right now. A bill to increase the minimum wage would probably pass the House of Representatives, but would face far tougher sailing in the Senate.
But wait a minute, we’re a federal system. What about the states?
That’s been a mixed bag. Take Virginia, for example. This year, with bi-partisan support, but apparently not enough, the state Senate considered a bill to increase the state’s minimum wage — which is currently pegged to the national number — from $7.25 to $10.
That would almost keep up with inflation but still stay well below the poverty level. Unfortunately, the bill failed 21 to 19. Maybe next year, but if you’re working a minimum wage job, that extra $2.75 an hour would have been helpful.
However not every state has lagged in increasing its own minimum wage. California has a minimum wage of $11, Maryland sets its minimum at $10.10, West Virginia’s at $8.25, Florida at $8.46, Arizona at $11and South Dakota at $9.10.
As you can see, this isn’t exactly a red America and blue America divide. Plenty of so-called red states have a higher minimum wage than the federal rate and a higher rate than Virginia.
There is a common argument, repeated over and over again, that raising the minimum wage will result in increased unemployment for those its designed to help.
In other words, if employers have to pay an extra dollar or two for each worker, they’ll hire fewer workers.
This argument has merit, but study after study has shown that any short-term increase in unemployment for minimum wage workers because of an imposed wage increase quickly goes away.
There is an almost knee jerk reaction on the part of many business lobbyists against any increase in the minimum wage. However, if they really considered all the costs involved, maybe they would have a different view.
After all, in economics there is no such thing as a free lunch. When employers get away with paying less than a reasonable wage floor, some costs get passed on to the taxpayer. Most minimum wage earners are the working poor, so they’re the ones that have to go on food stamps, get Medicaid and seek housing assistance.
In a sense, it’s a taxpayer subsidy to business. All so that some employers can get unfettered access to super cheap labor.
Of course, the opponents of setting a minimum are right about one thing. The minimum wage and efforts to increase it are a direct attempt to regulate wages.
But it’s by no means an across-the-board attempt to set wages. Rather, it’s aimed at the lowest rung of the wage ladder, and its only goal is to set a bare minimum on what a day’s pay for a day’s work is worth.
David Kerr, a former member of the Stafford County School Board, is an instructor in political science at VCU and can be reached at StaffordNews@insidenova.com.