This post started off to be a cut-and-dried presentation of the real (inflation-adjusted) value of the Federal minimum wage.
So let me get that punchline out of the way: $7.25 in January 2009 is the about the same as $10.79 in June 2024 dollars. So says the Bureau of Labor Statistics (BLS), via their graphically-challenged but zero-nonsense inflation calculator:
So, I’m done. That $7.25 has been the Federal minimum wage since 2009. No matter how you slice it, that $7.25/hour appears low in real (CPI-adjusted) terms. Compared to … ah, you name it. But in particular, compared to what it was in 2009, fresh off the last increase in the Federal minimum wage.
But so what. Again to cut to the chase: Of late, a lot of states have set their own binding state minimum wage laws. Nowadays, the majority of states (and overwhelming the majority of employed population) have minimum wage laws that effectively supercede the Federal minimum wage law.
One thing of interest to me is that the jump from $7.25/hour to $12/hour, in three years, doesn’t seem to have increased Virginia unemployment markedly. I mean, just at a glance, Virginia’s current unemployment rate is 2.7 percent. That’s pretty good. Just sayin.
Finally, nothing is free. If, in the end, people who eat a lot of fast food ended up paying for that increase in the minimum wage … that’s not a terrible outcome. We’ve long imposed sin taxes on alcohol and tobacco. Think of it as one of those.
Round up the usual suspects.
Source: Wikipedia.
I was struck by how much this map resembles just about every other map of America I’ve looked at recently. With a couple of exceptions (e.g., Florida), it’s very much like every other Dems-vs-Republicans map I’ve seen. By color, that could easily be a map of state mask mandates during the pandemic.
Well, here, test your prejudices. If I told you that a handful of states literally have no legislation at all, regarding minimum wages — no mention of the concept in their laws — which states would you guess those are? If you started in the Alabama/Missisippi/Louisiana area, give yourself an A.
Anyway, coasts versus interior, with a few exceptions. Florida stands out as unnaturally progressive, given their general bent. Otherwise, pretty much the usual suspects.
Virginia minimum wage law.
Source: Federal Reserve Bank of St. Louis (FRED)
The first punchline is that the Virginia minimum wage remains at $12/hour. The story appears to this: In 2020, Virginia raised its minimum wage, but at that time, required another vote for the portion from 2023 to 2025 to take effect. (That cautious approach is typical for Virginia state government, I’d say.) The conditionally-scheduled increase from $12 to $15/hour, from 2023 to 2025, was passed by 2024 the legislature, vetoed by the Governor, with veto sustained by the Virginia House. (Weirdly, I can find virtually no press coverage of the Governor’s veto except this except this write-up from a legal firm).
So it stays at $12. I have no idea what happens next, if anything.
The details of the Virginia minimum wage law are interesting.
For example, some types of jobs are categorically exempt: Agricultural workers, as is traditional, but also … golf caddies? I swear it says so in statute.
And prisoners. Virginia’s minimum wage law does not apply to prisoners. Nor does the Federal minimum wage law. The more I read about prison labor, the less I want to know. In Virginia, the law at least specifies that the resulting products have to be sold to government and related entities, and not sold on the open market (based on this statute), unless with specific approval of the Governor.
Does the Virginia minimum wage law cover tipped workers, or not? My short answer is … yeahno. Yeah, if I got it right, in theory, tipped employees are guaranteed $12/hour in combined wages and tips. And, in determining the legal minimum hourly wage for a tipped employees, employers can assume enough tips that the legal hourly wage is … $2.13, per the U.S. Department of Labor. Same as it always was. (With the understanding that if the employee wants to demonstrate that the combined wage and tip income is habitually below $12/hour, so that the hourly wage paid by the employer should go up, the employee has to retain and show all tips to the employer, to establish the typical hourly tip income.)
The crazy-beyond-crazy sleeper is the definition of “tipped employee”: A dollar a day. In tips. Federal law defines a tipped employee as anyone likely to make $30 or more, per month, in tips. States just follow suit.
We who live in the era of the tip jar have to wonder just how old that $30/month figure is? Answer: In round numbers, that hasn’t been updated in half a century. I finally tracked that down (California State University Office of the Chancellor, Google Link to pdf), emphasis mine:
20 As amended by section 3(a) of the Fair Labor Standards Amendments of 1977, effective January 1, 1978. Prior to January 1, 1978, the dollar amount was $20.
As an economist, I have long viewed the ubiquitous tip jar as rational reaction to the abysmal minimum wage. Two sides of the same coin, as it were.
But with this mismash of state laws, I no longer understand how to think about the tip jar in retail settings. I need help.
Dear Kamala: Please post Federal guidelines on tipping. TIA.
This request flows from what I see as the unfortunate but true connection from adequacy of the minimum wage to tipping.
Kamala Harris, please threaten to push for a modest raise in the Federal minimum wage. Currently $7.25, last increased in 2009.
But wait, didn’t I just get through showing that, these days, the Federal minimum wage hardly matters?
Answer: Yes, that’s why this is a genius idea. If the Dems are for it, the Republicans must be reflexively against it. Even if it does almost nothing.
I want to hear the sound of Republicans collectively hocking a loogie on the very idea of a minimum wage. (As a bonus, perhaps some will go on to heap scorn on child labor laws.)
More to the point, I want that collective Republican “patooey” to be heard clearly by 20-something working stiffs, particularly in the four battleground states circled above. I don’t think anything could sharpen up the difference between the Dems and Republicans any more.
Secondarily, it would be fun to see the hoops many Republican governors would have to jump through to lambaste the lefty-libs for this notion, in those cases where their own state minimum wages are well in excess of the current Federal level. Such states include Florida and South Dakota.
Fun, for much the same reason that watching Jeopardy! is like watching the Supreme Court. We all know the answer. All the art is in carefully phrasing the question that gives you that answer.
Plus, raising the Federal minimum a bit might help some of the lowest-paid.
You never know.
Stranger things have happened.
It’s up to the Congress anyhow. So if the House is against you, you can blame them if nothing happens on this front.
Vice-President Harris, while you’re at it.
Howsabout taking a look at the Fair Labor Standards Act.
I mean, a dollar a day? That’s in your law. It’s how you define a tipped employee. As documented above, that figure dates to 1977 legislation. No huge exaggeration to say that it’s now a half-century out-of-date. (N.B., per the BLS inflation calculator, $30 in 1977 is the equivalent of more than $160 today.)
Where you find one dusty old cobweb-covered provision, you’re apt to find many.
Haven’t you heard grumblings abut “wage theft”, from the masses? I think this whole accounting-for-tips-of-tipped-employees thing is a source of grievances, Wouldn’t it be nice to show some concern for what amounts to a common grievance of the poorly-paid? That’s not to say that each such grievance is justified, but at a minimum to acknowledge that it is a grievance.
Or do you feel that the current system works well for such people, and nothing needs to change? Or even, more narrowly, nothing in that law needs to change.
Or something else entirely. Can’t rule that out.
Conclusion: Why do the Heathen Rage? Dead ends.
Best guess, many of them are not well off, and nothing about that looks like it’s going to change.
That’s my view of the root cause of disaffected youth. In any case, I keep reading that The Youth are Disaffected.
And I keep meaning to look up that word.
Disaffected: Dissatisfied with the people in authority and no longer willing to support them. Per Google. I think the nuance is more “indifference to what happens”, rather than those of the more active “burn it all down” persuasion.
My guess is that much of that, in electorate Youth (typically defined as 18-25 sometimes 18-29), comes from people who are (or perceive that they are) in dead ends. Dead end job, dead end society, dead end politics. From that mindset, thing’s aren’t great now, there’s no obvious path by which they can get better, so there’s not much in it for them, for preserving the current system.
Not that all dead ends are remediable. For goods and some services, American labor is in head-to-head competition with (e.g.) much lower-paid Chinese labor. I don’t expect Amazon to be dominated by U.S.-made products any time soon.
So a bit of disaffection is warranted. Google “disappearance of the U.S. middle class”, and you’ll get the drift.
Toss in some global warming, for sure. The Youth are screwed, the only questions are how much and how soon. As a country we appear deadlocked on doing much about either.
Ponder retirement in their shoes. Lifetime savings from working near the minimum wage? Get real. Top that off by looking at likely Social Security benefits 40 years from now. Under no circumstances ponder Medicare.
Finally, purely based on anecdote, I think the prevalence of sub-middle-class -end jobs in America today is why The Youth really resent well-to-do geezers who won’t retire. To them, old people who have made their fortunes, but continue to work, aren’t inspiring examples of living life to the fullest. They are clogs in the pipeline of upward mobility.
“Boomer”. An epithet used by The Youth in place of “old person, please do us a favor and die soon”.
And yet, even if there are some valid reason to see the world as full of nothing but dead ends, we really can’t afford to have the disaffected determine the election.
My feeling, FWIW, is that the arrow of time points in one direction. You can’t steer a car by looking in the rear view mirror. Or fill in your favorite metaphor.
There is no way to go back to the future. At best you can try to face forward as you stumble into it. I just have to say the phrase “national climate policy”, and my choice is made. With the idea being that some (Dems) beats none (Republicans). And both beat pretending that climate change isn’t a threat, and using that as pretext for promoting greater use of fossil fuels (Republicans).
Drill, baby, drill. As national climate policy, that’s a flunk.
So, Harris it is. She’s got my vote. I hope she’s up to the task. The sooner she goes beyond criticizing Trump, and actually puts something useful on the table, the better.
I think there’s no better place to start than policies directly affecting low-wage workers.
