The issue of minimum wages has to be viewed in the context of other major developments that have led to
the social and economic improvement of the labor force beginning with the Wagner Act of 1932 recognizing
collective bargaining by labor, NLB (1933) OSHA (1972), and more recently with the Workforce Investment
Acts of 1998 and 2013. In my view, minimum wages have not achieved similar results.
The Fair Labor Standard Act, 1938 established the hourly minimum wage of 25 cents. Since then it has been
raised 22 times and in July 2009 to $7.25. Congress granted the states to set their minimum wages above
this level. Currently Washington has the highest at $9.32 with Georgia and Wyoming, the lowest at $5.15
an hour. Tracing its history after 1938 it was $1 in 1956, $2 in 1974, $3.10 in 1980 and $6.55 in 2008.
Since 2009 it has been $7.25. In April 2014 the Senate debated raising the minimum to $10.10 in two
years. It failed to pass. I calculated that at present the average for the 50 states is $7.47 slightly
over the statutory minimum.
Historically its real value has not kept up with inflation. The highest real value was reached in 1968 at
$10.69 if we take 2013 CPI index based on 1982-84, provided by the Congressional Research Service. This
would require the current $7.25 to be raised by $3.44 or 47 per cent. In real terms its value has
declined.
Comparing minimum wages to the earnings of all employees paid hourly also showed it has declined. From 50
percent in 1968 it declined to 46 percent in 1981. It has further declined to 36 percent in 2013 with
the average hourly earnings in the private sector at $20.31 and the statutory minimum at $7.25. Space
does not permit me to cite evidence from the recent "Low Level Living Standard Income Level"
under the above WIA Acts to show that minimum wages are still below that level.
Economists are divided in their findings about the employment effect of minimum wages. My view is we have
enough resources to take care of the effect by helping those businesses if only we cut down on corporate
welfare and the obscene wastage of hard earned dollars abroad. It is far more civilized to provide for a
livable minimum wage for all.
V. N. Krishnan
Bowling Green