Ensuring the minimum wage keeps up with economic growth would be the best way to help workers and preserve FDR's legacy
labour
It may seem like a lot, but it's not the most important change in the bill. AP Photo/J. Scott ApplewhiteThe US$1.9 trillion pandemic relief bill that the House is expected to soon pass includes a gradual increase in the federal minimum wage to $15 per hour by 2025. While its chances in the Senate appear slim, the proposal has brought national attention to the minimum wage, which has been stuck at $7.25 since 2009. Supporters argue a higher minimum wage would translate into higher incomes for millions of low-wage employees, such as restaurant waiters, retail salespeople and child care workers, and thereby lift a lot of people out of poverty. Opponents claim it would hurt businesses and lead to a lot of job losses. As an economist who studies labor markets and income inequality, I believe both claims exaggerate the impact and miss a key point of what the minimum wage is meant to achieve. The current debate offers a perfect opportunity to restore the wage floor’s original purpose, as laid out by FDR over 70 years ago. Preventing employer abuses The federal minimum wage was first implemented under the Fair Labor Standards Act in 1938 at a very modest 25 cents an hour – about $4.61 to...
The Conversation
Feb 26, 2021