Under Georgia law, one hour of work isn’t worth a whole lot. Employers are only required to pay their employees $5.15 an hour, an amount that equates to just over $10,000 per year for a full-time job. Our neighbors aren’t doing much better. South Carolina, Tennessee, Alabama, Mississippi and Louisiana currently have no minimum wage laws on the books.
Luckily, these states and others are covered by the federal Fair Labor Standards Act (FLSA), which preempts state law and requires a slightly more palpable $7.25 per hour. While this yields only an annual income of $15,080 for full-time workers, an amount that situates families of two below the federal poverty line, the federal minimum wage still serves as minimum guarantee of economic security for the 1.5 million American workers who currently earn it. Some states have experimented with raising the minimum wage in an effort to further improve conditions for their workers. However, the examples of Georgia and its neighbors show that some states would be more than happy to take the opposite track and revert to lower or no minimum wages, demonstrating exactly why a federal minimum wage is so necessary.
Since its inception, the federal minimum wage has been under constant attack by business interests and conservatives who claim it promotes economic inefficiency. The libertarian-minded Koch brothers, who spent over $889 million on the 2016 elections, have consistently lobbied for the abolition of the federal minimum wage. When Congress last voted to raise the minimum wage in 2007, more Republicans voted against than for it. President Donald Trump has expressed a somewhat incoherent set of views on the issue, but stated in a 2016 Washington Post article that he would “leave it to the states … to compete with each other.”
These responses rest on the boilerplate Republican response to government regulation: that it stifles growth, harms workers and interferes with what would otherwise be a functioning free market. Theoretically, these arguments hold up. As anyone who has taken introductory economics knows, the demand for labor equals supply in a perfectly competitive marketplace, setting an optimal price and quantity. However, a quick American history lesson shows that this point is anything but “optimal” for many workers. During the Gilded Age of the late 1800s, many workers were paid little to nothing for long hours of work in dangerous conditions, trapping them in a cycle of dependence akin to slavery. Clearly, the labor market was not perfectly fair, as businesses held more bargaining power than workers in determining wages. Former President Franklin D. Roosevelt expressed the need for a minimum wage best when he stated in 1933 that “no business which depends for existence on paying less than living wages to its workers has any right to continue in this country.”
Roosevelt managed to push the FLSA through Congress in 1938, and it was subsequently ruled constitutional by the Supreme Court in West Coast Hotel Co. v. Parrish under the federal government’s authority to regulate interstate commerce. Since then, the minimum wage has been raised 28 times under both Democratic and Republican presidents. Studies on the results of these raises have been inconclusive — some found that raises result in modest job losses and others found no effect. However, what is crystal clear is the benefits the raises carry for American workers. Research consistently finds that these raises lead to measurable reductions in poverty. This income boost can be a major difference for the parents and working adults who make up an increasing percentage of minimum wage earners.
As the power of the federal minimum wage erodes due to inflation, states have taken matters into their own hands. In 2016 alone, voters in four states ranging from Arizona to Maine voted to raise the minimum wage. To some, this might be evidence that states are capable of handling the issue themselves. However, other states have gone in the opposite direction, with 27 states passing legislation to prevent local municipalities from raising their own minimum wages. Without federal mandate, these states would likely engage in a further race to the bottom, selling out workers by lowering or abolishing their minimum wages. In a nation without campaign finance regulation, a return to the days of routine worker exploitation is a very real prospect. The federal minimum wage, however imperfect, is a bulwark against such a mistaken action.
Andrew Kliewer (20C) is from Dallas.