By Levin Kaio|USA
The minimum wage has created controversy amongst various political and economic ideologues and is worth taking a closer look at. The appearance of a capsized remuneration is merely an attempt by the U.S government to help the poor achieve an equal opportunity and overcome impoverishment. This policy was created in the early to mid-twentieth century when President Franklin D. Roosevelt proposed the Fair Labor Standards Act of 1938 (Grossman). This progressive approach to poverty was radical, and rightfully so, due to the understanding that the government was mandating businesses to pay a fixed wage rather than pay based on individual skill sets. The deliberate attempt to control the free market limits financial gain for the common individual and prohibits opportunity to expand a business, which only points toward one solution: abolishing the minimum wage entirely. Having a living wage may have had a strong moral reasoning for its original intent, which could have resonated with low-income individuals, but it fails to recognize that a society built on economic freedom cannot function when constricted by the government.
The development of the minimum wage originates from the province of New Zealand during the year 1894 (Bose). This new legislation was introduced to the whole nation of New Zealand and even across all industry and businesses. Following the example of New Zealand, Australia became the second jurisdiction to approve of a minimum wage but because it was still under the British Commonwealth, it followed the direction that the Queen of England preferred (Commonwealth). This policy once implemented will increase the price of goods in exchange for a slight increase in labor participation. The minimum wage law only placed these restrictions that “only covered six industries that were notorious for paying low wages” and soon spread to over 150 industries by 1904 (Bose). After the approval of the minimum wage in the UK commonwealth in 1909 (Commonwealth), the U.S caught a glimpse of how the government could assist individuals financially. With this desire to assist the poor within the United States, regulation was placed on businesses but was the intrusion of government profitable to the country. During the Great Depression (1929-1939), President Franklin Delano Roosevelt devised a plan to increase the wages of the workers that were being curbed by “greedy” businesses. President Roosevelt made these laws under the “New Deal” to promote equal pay and fair working standards, which included a maximum workweek of 40 hours, minimum pay of 25 cents per hour and, to promote child labor laws, have the minimum working age at 16 years old (Grossman). Supporters of the minimum wage advocate for its increase because the premise is that, by having government increase wages it, therefore, boosts poor individuals above the poverty line.
Those who support the increase of the minimum wage believe in the moral aspect of the proposal and build their respective think tanks around this belief. Supporters often look to accounts on the current economic atmosphere such as, “[W]e need policies that clearly do something for hard-working people who have been clobbered by a financial crisis they did not create” (Auerback). The political party that supports these proposals are actually both the left Democrats and the right Republicans; these parties only want to advance the income of their big donors and resent the poor. Statements such as “rich people are inherently evil” are what make the groundwork of the current activism for the increase of the minimum wage possible. Firstly the increase in the minimum wage would help families, financially, by having “more family income, some people would choose to retire, go back to school, or have children, making it easier for others who need jobs to find them” (Auerback). By having this policy implemented followers of the increase of minimum wage believe that the middle class would grow and even extending it to a point of predicting that it would “raise the incomes of 28 million Americans” (Auerback). The raising of income of many Americans is one of the many claims that supporters promulgate, this prediction is based on a moral duty of government to acquire the wealth from the top and distribute it evenly. Ultimately, the goal is to a have a society that is equal in all ways and that those suffering financially can be lifted out of abject poverty by the wonders of legislation. This concept is the basis of the movement to increase minimum wage to a “living wage.” The application of a policy, such as minimum wage, would be catastrophic to those living in Hawaii because they will experience a higher rate of poverty and other economic backlashes.
Hawaii has recently proposed a bill to steadily increase the minimum wage to $22/hr by the year 2022 (Drewes). This bill that was introduced to the house floor in the beginning of 2017 and has been recorded as one of the most liberal policies in the states. However, the populous is largely ignorant of the implications of these policies and what this bill could have on a society such as the Hawaiian people. The proponents of the minimum wage bill, the Democratic party, is attempting to gain a moral high ground and claim that businesses need to pay a fair share to the citizens that are currently economically disenfranchised. If a required wage was implemented it would entail various economic backlashes such as the increasing of labor demand in return for a decrease in labor productivity. This move to improve the wellbeing of the poor has been most harmful to the diverse economic system that Hawaii barely maintains. Many supporters allow this morally bankrupt policy to associate the decrease in homelessness with the increase of the required wage but in reality, the change is negligible by most people, “[In a] 2017 count, conducted in January, found 7,220 sheltered and unsheltered homeless people across the state. That’s down 9 percent from 2016” (“Homelessness Statewide is Down”). The Hawaiian Democratic party attempts to use their power to pass this bill in order to fulfill a moral duty to the people cheated by the system. In the end, if Hawaii is to approve of the increase then Hawaii will deteriorate economically and see a gradual decline in population due to economic instability.
The underlying belief in the minimum wage is to construct a system in which the wealthy must pay more than half of their income to subsidize the poor. The implications of the minimum wage, in general, will decimate the economy because it will increase poverty and harm the people that it is intended to save the economically disgruntled. A case in 1923 refuted the future President Franklin Roosevelt, who “made a strong argument that a minimum wage was a violation of the constitutionally guaranteed freedom of contract embedded in the Fifth Amendment’s language about due process and the deprivation of liberty and property” (Stoll). To promulgate regarding minimum wage is to be against individual liberties and for the removal of economic freedom; the idea of government being able to determine prosperity via economic intervention is in itself a delusion.
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