Minimum Wage as Class Politics

As of this writing, the lowest that most workers can be paid is $6.55 an hour (approx. $12.5k a year), according to a piece of Federal law known as the Fair Labor Standards Act. Not all workers are covered under Federal minimum wage laws,  but most of these workers are also covered by their state minimum wage or possibly a local living wage ordinance. A month from tomorrow, the federal minimum wage will increase to $7.25 an hour (a 10.6% increase), the last in a three-stage increase passed in 2007.

While most people know of the minimum wage, and while most workers continue to benefit from its existence, few people really know the history of how it came about, how it changed, and why it stands as one of the few remaining pieces of “class politics” within the Democratic Party.

Background: the 19th Century

Throughout most of the U.S’ history, minimum wage laws had been declared verboten by the legal and political establishment. Legally, state courts had struck down minimum wage legislation in the 19th century as a violation of the right of “liberty of contract,” a right that the Supreme Court had deemed somehow part of the 14th amendment in Lochner v. New York (1905). Despite briefly allowing interference with women’s “liberty of contract” in Muller v. Oregon (1908), the passage of the 19th Amendment giving the women the right to vote prompted the Supreme Court to rule  in Adkins v. Children’s Hospital (1923) that, now that women were equal citizens with the vote, that minimum wages now interfered with their “liberty of contract.”

Politically, minimum wage laws were deemed “class legislation,” a term even more odious to 19th century conservatives than “government regulation.” Unlike laws giving huge amounts of public land to the railroads, or tariffs to manufacturers, or the gold standard, (which obviously were good public policies that benefited all men equally), the minimum wage was believed to be a kind of law that unfairly benefited the worker and undermined the equal protection of the law for employers.  So were maximum hours laws, health and safety laws, worker’s compensation laws, any kind of corporate regulation, or any kind of legislation (social welfare, transportation, education, housing, etc.) that gave money to poor people or took money from rich people.  And as Anatole France once said, “the law, in its majestic equality, forbids rich and poor alike to sleep under bridges, beg in the streets or steal bread.”

But while progressives at the time fought the idea that the minimum wage was “class legislation,” I would defend it because it is genuinely class legislation. The minimum wage is an effort to empower wage laborers against their bosses, to level the playing field of economic power, so that wages:

“must at least be sufficient to maintain him. They must even upon most occasions be somewhat more; otherwise it would be impossible for him to bring up a family,..No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed, and lodged…The liberal reward of labour, as it encourages the propagation, so it increases the industry of the common people. The wages of labour are the encouragement of industry, which, like every other human quality, improves in proportion to the encouragement it receives. A plentiful subsistence increases the bodily strength of the labourer, and the comfortable hope of bettering his condition, and of ending his days perhaps in ease and plenty, animates him to exert that strength to the utmost. Where wages are high, accordingly, we shall always find the workmen more active, diligent, and expeditious than where they are low.”(Adam Smith, Wealth of Nations)

However, the minimum wage  was never just about money. From the earliest days of days of the movement in the 19th century, the minimum wage was seen as an effort primarily directed at raising the social status of wage laborers. The original call for the living wage had many ideological roots – among union workers, it was associated with the republican ideal of the male worker as sole provider for his household, and the non-working wife as a status signifier; among middle class reformers, the end in mind was the abolition of sweatshop conditions and child labor, and the protection of women workers; and so on. As many historians have noted (Liz Cohen, Meg Jacobs, Kathleen Donohue, and others), the minimum wage became wrapped around the idea of ensuring an “American standard of living,” a nebulous ideal that nonetheless has within it T.H Marshall’s idea of a “social minimum,” to “live the life of a civilized being according to the standards prevailing in the society.”

Background: 1930s-1970s

In that sense, the minimum wage is an attempt to ensure that all American workers are economic citizens. And it is a source of some small pride that the minimum wage was the creation of the Democratic Party. In the 1930s, the minimum wage as we know it was the brainchild of Labor Secretary Frances Perkins, who pushed through a minimum wage provision in the National Recovery Administration (NRA) codes, and then successfully steered the Fair Labor Standards Act through an increasingly conservative Congress.

At the time, the minimum wage was a response to the crisis of the Great Depression, which had hammered wages repeatedly, and to longer term inequality in the labor market. Believe it or not, but the labor movement was initially quite cool to hostile regarding  the minimum wage, fearing that the minimum wage would become a ceiling rather than a floor. However, as the rise of the CIO and the increasing unionization of factory workers made the needs of unskilled and semiskilled workers more central to the labor movement, the labor movement warmed to the minimum wage as a necessary complement to their solidaristic policy of trying to “level upwards,” reducing the difference between the lowest and highest paid workers. The CIO and their political action committee pushed for a higher minimum wage to complement their own contracts and to bring up the wages of southern, non-union workers to prevent “runaway factories.”

And for forty years after the New Deal, the minimum wage was part of the residual class politics of the Cold War Democratic Party. Along with Social Security, raising the minimum wage every few years was a symbolic way for congressional Democrats to signal their continual allegiance to the American working class. When one party continually sought to raise your wages and increase Social Security benefits, and the other party voted against it,  working class voters quite often drew the desired lesson. At the same time that the Cold War was pushing Democrats to the right and closing off opportunities to complete the New Deal, the minimum wage was an open space for liberal Democrats to influence national policy. For beyond the symbolism, the minimum wage had a quiet and profound effect on the living standards of low-wage laborers and the social meaning of minimum wage work.

As you can see from this chart (hat tip to Wikipedia user Lalala666), repeated increases to the nominal minimum wage (dark blue)  in the 1950s and 1960s had an impressive effect on the real minimum wage (light blue), more than doubling it in the space of twenty years.  Arguably, this was a major factor in the so-called “Great Compression” of the post-war era, but it also changed the meaning of minimum wage work, from something that protected desperate sweatshop workers from starvation to something that afforded a modest income, the equivalent of $20,000 a year today.

That long flatline through the 1980s and the 2000s are signs of the bankrupt part of the Democratic Party, a sign that we failed to do the right thing for workers who both deserve a decent wage and who have always placed their trust and faith in our party as the instrument of their interests.

Today

Today, I feel somewhat optimistic that we are seeing a renaissance in the minimum wage as Democratic Party class politics. After the minimum wage increases of the 1990s, we have seen the emergence of a vibrant grassroots movement for living wage statutes that I would argue pushed the minimum wage more forcefully onto the Democratic Party’s agenda, and after a long period of Republican obstruction, we’re finally starting to see movement.

After July 24th, the minimum wage will have roughly returned to where it was in the 1980s, when the effects of Reaganism and ten years of inflation took a hammer to the value of the minimum wage. However, we will still be $3 an hour below the minimum wage’s historic peak in the late 60s/early 70s, which should remind us that the class politics of the minimum wage are by no means finished.

So what’s next for the minimum wage and its supporters?

1. Making the Minimum Wage Part of Our Politics – I thought that one of the real advantages to making the minimum wage increase part of the Democratic Congress’ “100 Hours” legislation was a real success, in that it made the minimum wage increase not just a technical adjustment, but a political signal about the policy priorities of the two parties, where for the first time in many years, Republicans were forced to argue against increasing wages for ordinary workers, and where Democrats were able to beat them (eventually). Over the next three years,  each year the first piece of legislation considered by a Democratic Congress should be a $1/hr increase to the minimum wage, a ceremony of commitment to the cause of social justice.
2. Lead, Don’t Follow – here, I think we can establish a useful call-and-response between progressives on the national and state levels, letting the states push past the federal minimum, and then leapfrogging the states to ensure that the Federal minimum wage should be, at most times, the highest minimum wage in the country. The right to “live the life of a civilized being” is a national concern, not a local one, but competition should for once work for ordinary people.
3. Ending the Undertow – the sad truth of minimum wage law is that inflation will eventually claw back any success, no matter how sweeping, over the decades. All that the opponents of a strong minimum wage need to is to delay and maintain the status quo, and the relative position of workers’ wages will fall. In order to prevent this, in order to write in stone the nation’s commitment to a social minimum, we must index the minimum wage to inflation, so that future fights over the minimum wage can revolve around what the upward improvement of people’s lives, not a defensive struggle against economic decline. And lest this be seen as some radical attack against free enterprise, let me just note that Oregon, Vermont, Arizona, Missouri, and Montana already index their minimum wages to inflation, and last time I checked, capitalism is still in existence in those states.

– Steven Attewell