Sometime several decades ago — probably about the time giant corporations that own low-end department store and fast-food restaurant chains gained power — the United States’ minimum wage lost its way.
The idea of a raising the minimum wage to an astounding $15 per hour, or even $10 per hour, were popular campaign concepts among Democrats and a handful of other groups during the 2016 presidential caucus and campaign seasons, as well as the 89th Iowa Legislature. It became a divisive issue that demonized those opposed, even in part, to whatever exact dollar amount sought by a proponent, as if anyone who didn’t wholeheartedly supported a $15 hourly minimum couldn’t possibly love children, puppies, the flag or American-made products.
However, it’s important to look at the history of minimum wage and its intended role. The purpose of establishing a legal minimum wage is not to force businesses to pay everyone a “living” wage. It’s to keep an arbitrary legal base wage for part-time work.
Jacking it high enough and quickly enough to artificially raise the amount of disposable income people will not help in the long run. It’s not simply about how millions will be put out of work or how automation will replace people more quickly. It’s about providing another government subsidy that bankrupts the system instead of addressing framework that would create more meaningful, long-term, free-market solutions.
Most Americans think of minimum wage as an absolute — a constant that has always been there, with its movement through the decades as a historical time marker. It’s often mentioned in context: In the case of my particular entry into the work force, Skid Row’s first few hits were on the radio, the Chicago Cubs won 93 games and the National League East title and the federal minimum wage was $3.35 per hour.
However, minimum wage has not always been universally embraced — not even throughout all of the last 100 years. After Congress passed the National Industrial Recovery Act in 1933, a series of Supreme Court and Congressional actions followed in the ensuing years, though the last challenge was in 1941.
Legal minimums are not meant to drive commerce or help individual workers progress financially. These types of laws are merely protection for workers against exploitation. Being paid at a level that doesn’t allow an adult to amply provide for themselves and/or their children is not exploitation — it simply means government needs to get cracking and find ways for more businesses to succeed.
Municipalities that pass a higher standard are in a different boat than states and nations in terms of wages. Not only must a city still be prepared to still staff its own government with the lifeguards and park employees that might work at or close to a raised minimum, it’s not so tough for a large city to live with the adjustments made by restaurant and hotel giants that can offset the cost with higher prices.
However, if whole states or the entire nation suddenly went to $15 per hour, even the businesses that survived the transition would have no incentive to pay beyond the minimum. Already, franchised stores are using their wage — well above the minimum — on recruiting banners and window posters. Creating a competitive market does far more to drive wages up than artificial and what amounts to temporary government interference.
An extremely gradual minimum wage increase would work for states and for the federal rate. The Iowa Legislature shouldn’t cave in to a short-term band-aid when it could be addressing the cooperate subsidies and big-business tax breaks that created the wage gap in the first place.
Contact Jason W. Brooks
at jbrooks@newtondailynews.com