It Was Always Supposed To Be A Living Wage
by Hanna Brooks Olsen
The fight to raise the minimum wage is being waged across the country, and has been for years. As workers and activists in New York fight for $15, citizens in Seattle, San Francisco, and Los Angeles are already seeing increases in their paychecks.
But all along the way, there are critics arguing that the minimum wage was never supposed to be a living wage, but rather, an entry-level wage. You were always, they argue, supposed to work your way out of it.
“The minimum wage was never intended to be a ‘living wage,’ on which one could support oneself let alone a family,” opined Lowell Kalapa, President of the Tax Foundation of Hawaii, in an op-ed a few years ago.
“Read history!” implored one commenter on a Pew Research piece about the minimum wage. “Jobs are important and we’re not business oriented enough to allow small businesses to hire more folk. The minimum wage is NOT a living wage. It’s a place to get experience, but the new generation is too lazy to try.”
Of course, if the commenter, himself, had “read history,” he would see that, in fact, the minimum wage was always supposed to be a living wage. In fact, to argue that the minimum wage was never supposed to be a living wage is completely anachronistic.
In his 1933 address following the passage of the National Industrial Recovery Act, President Franklin D. Roosevelt noted that “no business which depends for existence on paying less than living wages to its workers has any right to continue in this country.”
“By ‘business’ I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level — I mean the wages of decent living,” he stated.
A federal minimum wage wouldn’t be permanently mandated until 1938 under the Fair Labor Standards Act, the same bill which prohibited child labor and limited the workweek to 44 hours. Even then, the idea was the same: ensure that businesses have to a) pay people for the work that they do, and b) that the payment is at least enough to live on.
“Without question,” explained FDR, “[the minimum wage] starts us toward a better standard of living and increases purchasing power to buy the products of farm and factory.”
That phrase, “purchasing power,” is the lynchpin. By attaching purchasing power as an idea to the minimum wage, its creator was clearly stating that this wasn’t a wage just for teenagers with summer jobs, as many modern-day critics will imply. Requiring employers to pay a living wage was designed to make sure that everyone could live as long as they worked full time.
You can see this play out in the laws of various states, as well. In Washington State, the law states that “the department of labor and industries shall calculate an adjusted minimum wage rate to maintain employee purchasing power.” That means, expressly, that employees who work full time are expected to make a living wage.
Washington State has come close to keeping up its end of the bargain, though with ever-increasing rents and an extremely regressive tax base, the raise in minimum wage in cities like Seattle and Tacoma is indeed necessary. But nationally, the purchasing power of the minimum wage has been steadily decreasing since 1984, making the current minimum wage, in some ways, illegal.
But because the minimum wage isn’t adjusted to handle things like inflation or cost of living, its reach has varied widely over the years. According to the Bureau of Labor Statistics, it reached peak purchasing power in 1968, when it was valued at about the equivalent of almost $11 today. Feel free to bring up that fact to any Boomers who tell you that their first job only paid $1.60 per hour and they did just fine.
Some anti-living-wage lawmakers are so afraid that people will discover this fact about the minimum wage that they’re working to change the laws about it. In Wisconsin, legislators have replaced the term “living wage” with “minimum wage,” as if bracing for the day when the people there might start asking for more.
Unfortunately, despite Scott Walker’s protestations — he recently called it “lame,” somehow managing to sneak in some ableism in his rhetoric — it’s unlikely that anyone will do away with or reduce the minimum wage any time soon. If President Obama has anything to say about it, the federal minimum wage will be over $10 before he leaves office.
Which still not quite a living wage in many areas of the country (you can calculate your own living wage here, but beware — it skews low), but at least it’s moving in the right direction.
Hanna Brooks Olsen is a freelance writer living in Seattle. She writes and reports on politics, feminism, poverty, and other interesting subjects. Her work has appeared on the Atlantic, NPR, the Huffington Post, and a few other publications.
Support The Billfold
The Billfold continues to exist thanks to support from our readers. Help us continue to do our work by making a monthly pledge on Patreon or a one-time-only contribution through PayPal.