In a national economy that seems continually on the verge of stagnation, one ill-advised question keeps returning to the center of a politically charged political economy — should Congress raise the federal minimum wage?
The answer is: no.
At best, raising the minimum wage by a dollar or two might be a symbolic expression of support for those workers on the lowest rung on the ladder of life. Think of it is as a Congressional "attaboy" for the lowest-skilled workers in the American economy.
Fortunately, hikes in the federal minimum wage generally have been modest enough that the economic disruption has been minimal.
In inflation-adjusted 2013 dollars, the minimum wage in 1960 was $7.78 an hour. Fifty years later, the minimum wage was almost identical: $7.83 an hour. Congress periodically gives a little by raising the rate, and then inflation takes a little by lowering the real minimum wage.
Doing something as foolhardy as doubling the minimum wage has never been on the table — until now.
Having gained little traction on the plan announced in February’s State of the Union Address to raise the minimum wage from its current $7.25 to $9, President Obama is now upping the ante to $10.10. That would be a 39 percent increase. Labor leaders scoff at even that. Some cities and states have passed minimum wages as high as $15 an hour. Protesters demanded this when they rallied last Thursday at about 100 fast-food restaurants across the country.
But a worker demanding a higher wage is different from a worker proving to his or her employer that his labor is worth more money.
Indeed, economists have long been troubled by a dramatic increase in the minimum wage.
In market economies, wages are determined by the productivity of labor. Sometimes employers need low-skilled workers, often teenagers or young hires with limited experience. In other cases, including knowledge-based industries, employers pay more for the skills they need to advance their companies.65 comments on this story
Seen from the perspectives of the employee, the minimum wage isn’t the ending point – it’s the starting point. And every worker should make every effort to get education and training to qualify for higher-paying employment.
We really can't improve upon the recommendations made on this subject by The New York Times in its editorial headlined, "The Right Minimum Wage: $0.00," published Jan. 14, 1987:
“Perhaps the mistake here is to accept the limited terms of the debate. The working poor obviously deserve a better shake. But it should not surpass our ingenuity or generosity to help some of them without hurting others. Here are two means toward that end: Wage supplements [and] Training and education .
“The idea of using a minimum wage to overcome poverty is old, honorable - and fundamentally flawed. It's time to put this hoary debate behind us, and find a better way to improve the lives of people who work very hard for very little.”