Franklin D. Roosevelt is considered one of, if not the, most progressive presidents in US History. He is responsible for policies such as Social Security, taking US currency off the gold standard, the FCC, and the SEC just to name a few. However, perhaps the most influential of the policies that he helped enact is the minimum wage.
Enacted by the Fair Labor Standards Act of 1938, the minimum wage was created to ensure that employers were not exploiting the labor of their employees. Initially, it was set at 25 cents an hour, but as of the time of this article’s publication, the federal minimum wage is $7.25. The minimum wage has been raised 22 different times by 12 different presidents. The House has recently passed the Raise the Wage Act, which is set to raise the federal minimum wage to over $15 per hour over the course of 6 years. Members of the Democratic Party have stressed time and time again how important it is to raise the federal minimum wage in our country. But is it really necessary?
Let’s start with pure numbers: According to the Bureau of Labor Statistics, only about 1.9% of the American workforce works at the minimum wage as of 2019. That is about 1.6 million workers working at or below the federal minimum wage. The same report states that the percentage of workers who earn at or below the minimum has been constantly decreasing over the last few years. In addition, the federal minimum wage is the standard for every state. 40% of US states have enacted their own minimum wage laws for their own reasons. Some have even already voted to increase the minimum wage to $15 over a duration of time. However, such increases can have negative consequences to the hours worked. Let’s take an example of what happened with the workers for the presidential campaign of Senator Sanders: his workers complained about not working at $15 per hour. So Sanders, a vocal advocate for a higher minimum wage, cut the hours of some of his campaign staff. Now imagine applying that standard with all the small businesses that have been decimated by state lockdowns and riots. The corporations that have made a fortune during the pandemic may be able to survive, but the small businesses that are currently struggling cannot. There would be fewer small businesses and the corporations would fill in the vacuum left by them and expand. With the expansion comes more political influence and most people on both sides of the spectrum should be wary of that.
It is not immoral to want laborers to make more money. In fact, it’s quite the opposite. However, when the federal government tries to step in with feel-good one-size-fits-all regulations, it can have unintended consequences. Even without a new minimum wage, the average American median household income has been increasing over the last 5 years. Therefore, if the current administration decides to adopt the domestic economic policy of the previous administration, then a $15 minimum wage may not be necessary.
