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EFTA01187655 | EFTA01187669 WHAT'S THE POINT OF THE MINIMUM WAGE? Most people think of the minimum wage as the lowest legal hourly pay. That's true, but it is really much more than that. As defined in the name of the Lord that established it - Fair Labor Standards Act of 1938 - the minimum wage is a fundamental labor standard designed to protect workers, just as child labor laws and overtime pay rules do. Labor standards, like environmental standards and investor protections, are essential to a functional economy. Properly set an enforced, these standards check exploitation, pollution and speculation. In the process, they promote broad and rising prosperity, as well as public confidence. The minimum wage is specifically intended to take aim at inherent imbalance in power between employers and low-wage workers that can push wages down to poverty levels. An appropriate way to floor set by Congress affectively substitutes for bargaining power the low-wage workers lack. When low-end wages rise, poverty and inequality are reduced. But that doesn't mean the minimum wage is a government program to provide welfare, as critics sometimes imply in an attempt to link it to unpopular policies. An hourly minimum of $10.10, for example, as Democrats have proposed, would reduce the number of people living in poverty by for 4.6 million, according to widely accepted research, without requiring the government to tax, borrow or spend. IS THERE AN ALTERNATIVE? No. Other programs, including food stamps, Medicaid and earned-income tax credits, also increase the meager resources of low-wage workers, but they do not provide bargaining power to claim a better wage. In fact, they can drive wages down, because employers who pay poorly factor the government assistance into their wage scales. This is especially true of the earned-income tax credit, a taxpayer-provided wage subsidy that helps lift the income of working families above the poverty line. Conservatives often call for increases to the E.I.T.C. instead of a higher minimum wage, saying that a higher minimum wage acts as an unfair and unwise tax on low-wage employers. That's a stretch, especially in light of rising corporate profits even as pay has dwindled. It also ignores how the tax credit increases the supply of low-wage labor by encouraging people to work, holding down the cost of labor for employers. By one estimate, increasing the tax credits to 10 percent reduces the wages of high-school educated workers by 2 percent. There are good reasons to expand the tax credits for childless workers, as President Obama recently proposed. It is a successful antipoverty program and a capstone in the conservative agenda to emphasize work over welfare. But an expanded E.I.T.C. is no reason to stint on raising the minimum wage - just the opposite. A higher minimum wage could help offset the wage-depressing effect of a bolstered E.I.T.C., and would ensure the both taxpayers employers do their part to make work pay. HOW HIGH SHOULD IT BE? There's no perfect way to set the minimum wage, but the most important benchmarks - purchasing power, wage growth and productivity growth - demonstrate that the current $7.25 an hour is far too low. They also show that the proposed increase to $10.10 by 2016 is too modest. The peak year for the minimum wage was in 1968, when its purchasing power was Nelly $9.40 in 2013 dollars, as shown in the accompanying chart. Since then, the erosion caused by inflation has obviously EFTA01187669 Epstein Web iOS app on the App Store.
May 12, 2026 at 9:49 PM