The Minimum Wage

If you feel like it, go ahead and click the link to the left entitled "The United States Constitution." If, after reading through Article 1 Section 8 you find a power called "Congress shall have the Power to set and maintain a minimum wage," you can stop reading right now. Interesting, though, that there is no such power; if that were true, this would be the end of the argument. Unfortunately, it's not.

In 1938, the Fair Labor Standards Act was passed stipulating a 25-cent-per-hour wage floor while restricting employees to a 44-hour workweek. No surprise here, it was instigated by wonderful Progressive President, Franklin Delano Roosevelt. This link explains a little more, if you're interested: http://www.time.com/time/nation/article/0,8599,1912435,00.html. Now, every State in the Union has its own minimum wage, which is fine: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the People" (Amendment 10). In all reality, this means the States can do what they please though the federal government cannot (if you'd like more on this subject, see the previous post on this blog). As it turns out, even without the help of Big Brother, each State has its own minimum wage law with 19 of them paying their employees beyond what federal law dictates.

The argument for minimum wage usually goes something like this:

Person A: "Minimum wage is good because if we didn't have it, people would be poor since companies are so evil and hate people."

Person B: "...Yea."

...but it should go more like this:

Person A: "We must have a minimum wage because otherwise companies would pay employees a fraction of what they need to survive."

Person B: "No one is forcing them to work there. If they demand a higher wage for their skill set, they are free to seek one."

Person A: "What about those who can't afford to find another job? Or those who didn't attend college, have five kids and are stuck flipping burgers during the day and cleaning office buildings at night? "

Person B: "I can match you anecdotal story for anecdotal story but that doesn't really get us anywhere, does it? As minimum wage rises, so does the cost of living, canceling out the minimum wage increase."

Person A: "That's nonsense! You just don't care about people. PEOPLE NOT PROFIT! PEOPLE NOT PROFIT!"

Person B: "Listen, if you want to have a rational discussion without yell--

Person A: "PEOPLE NOT PROFIT" -swings fist at person B-

Maybe the last few lines aren't how that conversation should go, but when Person B said "As minimum wage rises, so does the cost of living, canceling out the minimum wage increase," he was right. Look at it this way:

1. Federal law dictates a minimum wage increase from $5.85 in 2007 to $7.25 in 2009.

2. A grocery store must now pay their average employee $4,400 more in 2009 than in 2007.

3. Said employee now has $4,400 more than they would have two years ago.

4. Grocery store raises prices to cover the higher cost of its employees.

5. Employee now pays more for onions, tomatoes and peppers in the grocery store. Also, as other companies were affected by the minimum wage increase as well, the employee now pays more for TVs at Best Buy, furniture at Ashley, electricity from Power Co., fuel at Shell and on and on and on.

6. Federal law dictates a minimum wage increase from $7.25 in 2009 to $8.50 in 2011.

7. Repeat.

This is another great argument for Amendment 10. If a high-school dropout in Utah is unable to find work at $7.25/hour, in theory they should be able to go to Idaho and find work for $5.00/hour. Liberals look at this as a pay cut, but in reality you weren't receiving the $7.25 anyway, and $5.00 beats the hell out of $0.00 associated with not having a job (then we run into unemployment insurance which, many times, brings in more than the minimum wage, but we'll cover next time). A potential employee should be able to set their own wage for their own labor, but a minimum wage simply won't allow it.

Bottom line, if the States wish to enforce minimum wage laws of their own, that is fine. However, the federal government has absolutely no power to do so.