Demonizing the Minimum Wage

By William Finnegan

With the midterm elections approaching, the United States Congress finds itself in an exaggerated version of its customary posturing gridlock. Among the many urgent issues that it almost certainly won’t address this year are immigration reform, gun control, the Keystone XL Pipeline, the fate of the Export-Import Bank, and the federal minimum wage. A bill to raise the minimum wage from its current level, $7.25 per hour, to $10.10 an hour, over the course of two years, has been rattling around on Capitol Hill for eighteen months—with, it now seems, no hope of passing. Because the federal minimum wage has never been indexed to the cost of living, the debate over its efficacy and morality is regularly reëngaged as its value sinks and Congress is called upon to act.

The arguments against—a hundred years’ worth—were recently collected by a group of scholars calling itself the Cry Wolf Project. They sound hair-curling. “The minimum wage has caused more misery and unemployment than anything since the Great Depression,” Ronald Reagan said in 1980. “Rome, two thousand years ago, fell because the government began fixing the prices of services and commodities,” Guy Harrington, of the National Publishers Association, told Congress in 1937. The Fair Labor Standards Act, which set a national minimum wage of twenty-five cents an hour, in 1938, and also abolished most child labor, “constitute[d] a step in the direction of communism, bolshevism, fascism, and Nazism,” according to the National Association of Manufacturers. In the view of its opponents, the minimum wage—or raising an existing minimum—will always and inevitably damage the economy, kill jobs, doom American freedom, and/or harm the very people that it is meant to help. This litany of alarm has a dismal record as a description of reality, and yet has not changed much over the past century.