The minimum wage fight, explained

February 13, 2013

President Obama’s call in his State of the Union address to bump the federal minimum wage up to $9 an hour has directed new attention to a politically divisive issue. And it’s already triggered a new round of criticism by congressional Republicans who don’t agree with the president.

To better anticipate the direction of the current debate, it’s helpful to look at the history of the federal minimum wage law, how lawmakers have addressed the issue in the past and who is for and against raising it in the present debate.


(Scott Eells/Bloomberg)

What’s the federal minimum wage?

The Fair Labor Standards Act of 1938 established a minimum hourly wage for covered, nonexempt employees. It was $0.25 back then, and it is $7.25 right now, which is where it’s been since 2009, when a third consecutive annual raise kicked in. Before 2007, the federal minimum wage stood at $5.15 for nearly 10 years.

States have their own minimum wage laws. Some are higher, some are lower, and some are the same as the federal minimum wage. The higher number applies in each state.

And what exactly is Obama proposing again?

He is calling on Congress to gradually raise the minimum wage so that it hits $9 an hour in 2015. Obama also wants the federal minimum wage tied to the cost of living. Doing so would mean a raise for 15 million workers, the White House says.

It’s worth pointing out that Obama called in 2008 for the minimum wage to be raised to $9.50. Senior White House economic adviser Jason Furman told reporters Wednesday that the combination of certain tax credits the president secured in 2009 and upping the minimum wage to $9 would “exceed the minimum wage number he had called for on the campaign.”

Who agrees with the president?

Outside of Congress, organized labor groups support increasing the federal minimum wage. The AFL-CIO and the Service Employees International Union both applauded Obama for calling for a minimum wage increase. Some businesses, including the national retailer Costco, as the White House noted, have supported the idea. And it’s worth noting that Republican George W. Bush signed a law increasing the minimum wage in 2007.

In Congress, Sen. Tom Harkin (D-Iowa) introduced a measure last year to up the minimum wage to $9.80 and index it to inflation from there. Rep. George Miller (D-Calif.) introduced a companion measure in the House. The two have been working on a proposal this year to raise the minimum wage to $10.10.

Who doesn't like it?

House Speaker John Boehner (R-Ohio), for one. “When you raise the price of employment, guess what happens? You get less of it,” he said Wednesday. That neatly sums up the thrust of most of the declared opposition to raising the minimum wage from Republicans and business leaders — namely, that it can hurt employers and job growth.

“Any discussion about raising the minimum wage needs to recognize that small employers often have to operate under very slim profit margins," said Chamber of Commerce Senior Vice President Randy Johnson. "An increase has to be shouldered by the employer, who may have to spread it out over many employees. Too often that reality is left out of the discussion, as it was last night.  We will look at the proposal, consult with our membership and react accordingly.”

Sen. Marco Rubio (R-Fla.), who gave the official GOP response to Obama’s State of the Union, on Wednesday also rebutted Obama over the minimum wage. "I don’t think a minimum wage law works,” Rubio said.

How does the public feel?

As The Fix’s Aaron Blake noted this morning, polls routinely show that the public is in favor of increasing the minimum wage. A Public Religion Research Institute poll in 2010 showed that two-thirds of Americans would like to see the minimum wage at $10 an hour — including half of Republicans.

What’s next?

It’s not yet clear, but with Boehner’s strong opposition, it’s hard to see a push to raise the minimum wage gaining real traction in the House. We’ll find out in the coming months how strong an effort the White House and its allies intends to apply toward passing a wage increase, especially considering all of the other legislative priorities on Obama’s plate (immigration reform, gun control and a host of fiscal matters, to name a few).

For its part, the White House cited examples of a wage increase passing under Republican leadership as a reason for optimism.

"In 1996, when Newt Gingrich was speaker of the House, Congress passed an increase in the minimum wage," White House Press Secretary Jay Carney told reporters Wednesday. "When ... George W. Bush was president, he supported an increase in the minimum wage.  It is a bipartisan American principle, the president believes, that no one in the United States should work full-time and live in poverty."

Sean Sullivan has covered national politics for The Washington Post since 2012.
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Aaron Blake · February 13, 2013