Minimum Wage Doomsayers Are Still Wrong After 74 Years

this article excerpt appeared on Huffington Post:
go to link for complete article
Minimum Wage Doomsayers Are Still Wrong After 74 Years
Posted: 06/25/2012  6:52 pm
Few American institutions have been subjected to such a consistent stream of vitriol and assault as the minimum wage that celebrates its 74th birthday this week.  The first federal minimum wage was established when FDR signed the Fair Labor Standards Act (FLSA) on June 25, 1938.  The FLSA also established the 8-hour day, paid overtime and child labor protections into federal law. Since then, it has been amended nine times to expand coverage and to raise the wage to keep it in line with the nation’s economic growth.

Business leaders, industry associations, politicians and more recently think tanks opposed the FLSA and every legislative amendment since. They said it would destroy American civilization, kill jobs and hurt black people. Business owners predicted they would be forced into bankruptcy.

One business opponent of the 1938 legislation even warned the minimum wage would lead to the decline of the American empire. In 1937 Guy Harrington of the National Publishers Association testifying before a congressional committee claimed that “Rome, 2,000 years ago, fell because the government began fixing the prices of services and commodities. We, however, know what has always happened when governments have tried to superintend the industry of private persons. The final result has always been distress, misery and despair.”

Despite these (and more) constant predictions of doom, the minimum wage remains wildly popular in the eyes of the American people. They understand basic economics — when wages go up, people spend more.  Without minimum wage laws, employers pay less. They understand what I’ll call “Chris Rock-onomics,” the economic theory the comedian and social commentator described recently like this: “I used to work at McDonald’s making minimum wage. You know what that means when someone pays you minimum wage? You know what your boss was trying to say? It’s like “Hey if I could pay you less, I would, but it’s against the law.”

Happy Birthday, minimum wage.

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