Thoughts on Minimum Wage Laws

The constitution, the government, and the people

Published on April 6, 2007 By Draginol In Business

Until the Great Depression, minimum wage laws were consistently struck down by the Supreme Court. Using the 14th amendment as their basis, the supreme court's position was that the government did not have the power to regulate contracts between employer and employee.

The Great Depression caused them to take a fresh look at this and the result were state minimum wage laws.

Over time, the federal government itself got into the act and now we have national minimum wage laws and state ones as well.

The constutionality of these is murky. I personally don't agree with minimum wage laws. I don't think the government has any business telling me how much I should be paid or how much I should pay someone else. But I do think that it is within the power of the states to pass such laws by their duly elected representatives.

On the other hand, I don't see how the federal government has the authority to establish national minimum wage laws. That seems to me to be blatantly unconstitutional. The Supreme Court "found" this sweeping power in the Constiution in the clause on the federal government having the power to regulate interstate commerce. But that's really a cop-op in my opinion.

The problem with minimum wage laws is that they're arbitrary and pointless feel-good measures. In today's global economy, minimum wage laws might as well be called outsourcing laws or automation laws. If you're making minimum wage, that means that the value of your talent and skills is so low that you need the government to step in and artifically inflate it.

I remember some years ago having a debate on Usenet about minimum wage laws around the time they had last raised it and I said "I predict that in 10 years, you'll see a lot of these jobs being automated or sent overseas. So if you find yourself checking yourself out at the grocery store in a self service line, remember this." Of course, back in the early 90s, I got flamed and patronized on the reasons why grocery store check out lines couldn't be automated (impossible to stop shop lifting was the basic argument).

But sure enough, we have seem automation and outsourcing take their toll and the very same people who argue for minimum wage laws are the ones who complain about the results -- as if there is no connection between the two.

That said, I do believe states have the right to enact minimum wage laws. I don't see anything in the constitution that says (or implies) that the government can't do it. I just think it's a bad idea.

Comments (Page 2)

cactoblasta

on Apr 10, 2007

Raise minimum wage laws high enough and all labor is outsourced.

It's probably more likely that the US dollar would fall and inflation would rise, depending on how much of the population is on minimum wage. If too many people were affected outsourcing would be unlikely because labour would become cheaper, not more expensive, compared to labour purchased with a weaker US dollar.

But excessive inflation is never desirable, so it's still a very bad thing.

Secondly, there's no evidence to conclude that reducing welfare payments increases crime. On the contrary, the welfare reform of the late 1990s showed a different trend. Forcing people to get jobs takes away a lot of idle time that is spent conducting illegal activities.

Well it's never really been done, apart of course back in the really old days (ie pre-US days). It's historical fact that the various boni (conservative) attempts to remove state subsidies on grain in Rome tended to lead to rioting and crime waves on the enormous scale. Would it happen in a modern state? Who knows? It's never been tried. Your example isn't a complete removal, so it doesn't really count.

Anyway that doesn't really matter because minimum wage laws aren't really state welfare. They're more an effective political tactic that plays on consumer price memory to manipulate their ideals of success - someone whose first wage was 5 bucks an hour is going to feel 10 bucks an hour is a better wage on first thought. And that's a useful attitude to have in a populace. It implies success without actually having to provide it.

Welcome Guest! Please take the time to register with us.
There are many great features available to you once you register, including:

Richer content, access to many features that are disabled for guests like commenting on the forums.
Access to a great community, with a massive database of many, many areas of interest.
Access to contests & subscription offers like exclusive emails.
It's simple, and FREE!