Blog: Federal Minimum Wage

Statement

Blog: Federal minimum wage

The federal minimum wage was first enacted as part of the Fair Labor Standards Act of 1938 (FLSA). Although nothing in the act requires that Congress revisit the statute, as price levels continue to rise, Congress has periodically chosen to revisit the FLSA and increase the minimum wage. This was last done in 1997 when the minimum wage was raised to $5.15 per hour. Supporters of raising the minimum wage traditionally argue that increasing the minimum wage increases the buying power of the lowest paid workers. Whereas opponents of increasing the minimum wage argue that raising the minimum wage actually hurts low-income workers, by taking away current jobs, as well as future job opportunities.

I have some concerns about the minimum wage in general. First, unlike other income assistance programs that are paid for by general tax revenue - spreading the financial burden across all taxpayers - simply raising the minimum wage places the entire burden onto one small group; namely, employers of low-wage workers, and to some extent their customers. Large corporations may be able to absorb these extra costs but small business owners - who largely power job growth in our economy - cannot. More importantly, according to U.S. Department of Labor statistics, of the 73.9 millions American workers paid at hourly rates, only 2 million - or 2.7 percent of hourly-paid workers - are paid at or below the minimum wage. Furthermore, half of all of these minimum wage earners are under the age of 25 and primarily employed in service occupations, mostly food service jobs.

Under those circumstances, increasing the Earned Income Tax Credit or expanding education, child-care and health care tax benefits may be a better way to help the people we really want to help.

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