Exploring the Politics of the Minimum Wage

By Levin-Waldman, Oren M. | Journal of Economic Issues, September 1998 | Go to article overview

Exploring the Politics of the Minimum Wage


Levin-Waldman, Oren M., Journal of Economic Issues


For the most part, since its inception in 1938, the minimum wage has hovered at around 50 percent of average annual hourly wages for product,on and non-supervisory workers. Between 1981 and 1989, the minimum wage fell below 40 percent, and it again fell below 40 percent between 1990 and 1996. For some, the failure of the minimum wage to keep pace with inflation is a matter of deliberate government policy aimed at creating a low-wage economy [Piore 1995; D. Gordon 1996; Prasch 1996]. For others - mainly the mainstream of the economics profession - the fact that the minimum wage was not increased is a testament to the soundness of economic analysis that holds minimum wage increases to be detrimental to the economy as a whole. Both perspectives, however, may be problematic. The first assumes that government is a monolithic structure and can easily reach a unitary decision. Government is not. At least in the United States, it is a collection of institutions, actors, and processes that occasionally achieve some coherence on the basis of consensus. More often than not, however, different actors in different institutions follow their own respective agendas. And the second view is problematic because it assumes that economic models alone drive the policy process. They do not. Policy is a function of a mix of variables and is highly contingent on the various interests and actors involved [Kingdon 1984; Stone 1988]. It is more the case that interests rely on economic models when they serve to buttress their arguments. By appealing to a model, an elite can cloak its selfish interests in language that may appeal to the larger public interest.

In this paper, I intend to argue that the minimum wage, as much as it is a serious economic issue, is above all else a political one. The minimum wage is a political issue on several levels. On one level, there are the politics surrounding the choice of models. On another level, there are the political interests of those who engage in the debate. Unlike entitlement programs, the minimum wage is not indexed to inflation, but requires an act of Congress for changes to be made. Congress, however, is comprised of members whose primary obligation is to serve the constituents of their districts [Mayhew 1974; Kau, Keenan, and Rubin 1982]. If it is not in the interest of their district or if it is not in the interests of those who contribute to their campaigns - regardless of party position - members will vote against increasing the minimum wage. Another way to state this is to say that even if a member's party favors an increase in the minimum wage, that member may still be inclined to vote against it if his or her constituency has an interest in not raising it.

The purpose of this paper is to look at a variety of political issues surrounding the minimum wage. I specifically examine how the politics in the choice of methodological models can lead to different ideological positions, which ultimately will get played out in the political arena. To this end, I have organized this paper as follows: I first examine the competing models and the ideological implications that flow from each. From there I explore why it is that one particular model has become the political focus of the debate at the expense of others. What I hope to show is that because good data on the minimum wage have been so lacking, the issue has been ripe for political manipulation. Nowhere do the politics of minimum wage show themselves to be of greater importance than in those regions of the country with "right-to-work" laws. The final section of the paper examines the voting patterns of members of Congress. It is no secret that Democrats have traditionally favored minimum wage increases, while Republicans have opposed them. The focus of this paper is on the exceptions and the specific states they are from. What I intend to show is that Democratic members of Congress, when they come from "right-to-work" states, tend to vote against minimum wage increases even though Democrats traditionally favor it. …

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