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The federal minimum wage doesn’t really matter anymore . . .
View related content: Carpe Diem
. . . is the title of a recent Wall Street Journal article. Here’s an excerpt:
The federal minimum wage is poised to become an irrelevant labor policy.The national pay floor of $7.25 an hour hasn’t been adjusted for a decade, the longest it has ever gone unchanged. And with Washington policy makers polarized on the issue, there is little chance the level will be increased soon.
Meanwhile, 29 states representing about 60% of the workforce have set their minimum wage higher. Dozens of large employers — including Walmart Inc., McDonald’s Corp. and Amazon.com Inc. — have pledged to pay employees well more than $7.25 an hour, while the tight labor market is causing firms of all sizes to raise pay. And a handful of high-cost cities, such as Seattle and San Francisco, have a level at or above $15 an hour.
As a result, a tiny share of Americans, just 0.28% of the 156 million civilian workers earned the federal minimum last year, according to the Labor Department (see chart above that also shows the share of hourly workers earning the federal minimum wage). Most of those employees were younger than 25 years old. That means the current level of the federal minimum wage appears to be having little economic impact. While it may help boost pay for some individuals, it is neither costing jobs nor lifting wages for most of the country. Without action by Washington, the proportion of workers affected by the federal minimum is likely to keep shrinking as long as it remains at its current level, which appears probable.
MP: Who’d a-thunk it? Workers and the economy are doing just fine even as the federal minimum wage effectively fades away as wages climb and “political wage setting” becomes irrelevant.