The US federal minimum wage has been a controversial topic since the 1930s, with Democrats proposing adjustments to benefit workers, while Republicans seek to set caps benefiting employers. A formula for determining the wage has never been established, and it is largely determined by the sponsor of the bill. The most recent raise does not match the spending power of the 1979 adjustment, and opponents and lobbyists frequently voice their objections to the wage increase.
Since its inception in the 1930s, the U.S. federal minimum wage has been a thunderbolt of controversy and seemingly endless debate among lawmakers. Historically, the Democratic party has generally been to propose adjustments, which would greatly benefit workers, while the Republican party has sought to set caps on the amount of the raise, which largely benefits employers. Depending on which political party is in control of Congress, the minimum wage may not be adequate for years, or it may be changed any number of times in a decade.
The determination of the effective minimum wage was initially to be the work of a supervisory committee. This council made up of lawmakers, economists and business leaders would consider the current social and economic climate to determine whether an adjustment was necessary. Factors such as the unemployment rate, inflation rate, and median household income would theoretically determine the lowest wage, and the federal minimum would be adjusted accordingly. That’s how it was supposed to work on paper, anyway.
In fact, a formula for determining the federal minimum wage has never been established. Some sources believe it is calculated as a certain percentage of the current poverty line for a family of four, but this has not proven to be the case in recent years. Currently, it is not even indexed to the inflation rate. Efforts have been made to link the minimum wage to the annual rate of inflation, but these proposals have not been adopted. In fact, the most recent raise, adopted by Congress in 2007, doesn’t even match the actual spending power of the 1979 adjustment.
Realistically, the amount of the minimum wage is largely determined by the sponsor of the bill designed to adjust it. A supporter of his elevation could systematically introduce bills to the Senate to that effect. Many of these laws may die in commission or not receive enough support from the opposing political party. Occasionally, however, a bill survives the initial process and a committee is formed to study the proposal.
It is during this review process that a final minimum wage level can be determined. Opponents and lobbyists frequently voice their objections to the wage increase, citing increases in labor costs, possible layoffs, and a general raise for workers currently working just above the current minimum. Proponents may argue that wages should be adjusted to keep pace with real living costs or to encourage the poor to choose work over public welfare programs. At the end of these discussions, a new federal minimum wage usually emerges. As a concession to employers, however, the new wage is gradually being spread over several years.
Maybe one day the amount will be indexed to a standard economic indicator like inflation or the annual poverty line, but until then any increase will likely be tied to the political climate at the time.
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