"Moreover, as employers are forced to pay low-skilled workers a higher wage, they are less likely to hire such workers. Citing a study by Michigan State University's David Neumark, Horowitz writes that a living wage set at 50 percent above the minimum wage increases the average wage for workers in the bottom tenth on the pay scale by 3.5 percent. However, the same wage increase reduces the...
18th - 20th Century Quotes on Minimum and Living Wage
"It is not the actual greatness of national wealth, but its continual increase, which occasions a rise in the wages of labour. It is not, accordingly, in the richest countries, but in the most thriving, or in those which are growing rich the fastest, that the wages of labour are highest. England is certainly, in the present times, a much richer country than any part of North America. The wages of labour, however, are much higher in North America than in any part of England."
"A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more; otherwise it would be impossible for him to bring up a family, and the race of such workmen could not last beyond the first generation."
"'The real wage-fund was, first, the brain-work of the original conceiver of the whole design; secondly, the brain-work of the capitalist who estimated the degree of confidence to be placed in his conception; and, thirdly, the mental appreciation of the public as regarded the beauty of the ware.'
And so, in many enterprises, there cooperate the conceiving mind, the constructive mind, the risking and self-denying capitalist, and, lastly, the manual laborers, who, blind to all but the visible and material, are prone to exaggerate their own importance and overlook the contributions of the other cooperators. The laborers must be taught that in the brain of the conceiver lies the great source of their wages, and must abandon the dangerous fallacy that those who toil visibly with their hands are the just owners of the product."
"To the second end, we hold that minimum wage commissions should be established in the Nation and in each State to inquire into wages paid in various industries and to determine the standard which the public ought to sanction as a minimum; and we believe that, as a present installment of what we hope for in the future, there should be at once established in the Nation and its several States minimum standards for the wages of women, taking the present Massachusetts law as a basis from which to start and on which to improve."
"We stand for a living wage. Wages are subnormal if they fail to provide a living for those who devote their time and energy to industrial occupations. The monetary equivalent of a living wage varies according to local conditions, but must include enough to secure the elements of a normal standard of living--a standard high enough to make morality possible, to provide for education and recreation, to care for immature members of the family, to maintain the family during periods of sickness, and to permit of reasonable saving for old age."
"In the second case the appellee, a woman twenty-one years of age, was employed by the Congress Hall Hotel Company as an elevator operator, at a salary of $35 per month and two meals a day. She alleges that the work was light and healthful, the hours short, with surroundings clean and moral, and that she was anxious to continue it for the compensation she was receiving and that she did not earn more. Her services were satisfactory to the Hotel Company and it would have been glad to retain her but was obliged to dispense with her services by reason of the order of the board and on account of the penalties prescribed by the act. The wages received by this appellee were the best she was able to obtain for any work she was capable of performing and the enforcement of the order, she alleges, deprived her of such employment and wages. She further averred that she could not secure any other position at which she could make a living, with as good physical and moral surroundings, and earn as good wages, and that she was desirous of continuing and would continue the employment but for the order of the board. An injunction was prayed as in the other case."
"The statute now under consideration is attacked upon the ground that it authorizes an unconstitutional interference with the freedom of contract included within the guaranties of the due process clause of the Fifth Amendment. That the right to contract about one's affairs is a part of the liberty of the individual protected by this clause, is settled by the decisions of this Court and is no longer open to question."
"It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By 'business' I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level-I mean the wages of decent living.
Throughout industry, the change from starvation wages and starvation employment to living wages and sustained employment can, in large part, be made by an industrial covenant to which all employers shall subscribe. It is greatly to their interest to do this because decent living, widely spread among our 125,000,000 people, eventually means the opening up to industry of the richest market which the world has known."
"With the establishment of these rudimentary standards as a base we must seek to build up, through appropriate administrative machinery, minimum wage standards of fairness and reasonableness, industry by industry, having due regard to local and geographical diversities and to the effect of unfair labor conditions upon competition in interstate trade and upon the maintenance of industrial peace. ...
We know that over-work and under-pay do not increase the national income when a large portion of our workers remain unemployed. Reasonable and flexible use of the long established right of government to set and to change working hours can, I hope, decrease unemployment in those groups in which unemployment today principally exists.
Our problem is to work out in practice those labor standards which will permit the maximum but prudent employment of our human resources to bring within the reach of the average man and woman a maximum of goods and of services conducive to the fulfillment of the promise of American life."
"We have already seen some of the harmful results of arbitrary governmental efforts to raise the price of favored commodities. The same sort of harmful results follows efforts to raise wages through minimum wage laws. This ought not to be surprising; for a wage is, in fact, a price. It is unfortunate for clarity of economic thinking that the price of labor’s services should have received an entirely different name from other prices. This has prevented most people from recognizing that the same principles govern both.
Thinking has become so emotional and so politically biased on the subject of wages that in most discussions of them the plainest principles are ignored. People who would be among the first to deny that prosperity could be brought about by artificially boosting prices, people who would be among the first to point out that minimum price laws might be most harmful to the very industries they were designed to help, will nevertheless advocate minimum wage laws, and denounce opponents of them without misgivings."
"Yet it ought to be clear that a minimum wage law is, at best, a limited weapon for combatting the evil of low wages, and that the possible good to be achieved by such a law can exceed the possible harm only in proportion as its aims are modest. The more ambitious such a law is, the larger the number of workers it attempts to cover, and the more it attempts to raise their wages, the more likely are its harmful effects to exceed its good effects."
"All this is not to argue that there is no way of raising wages. It is merely to point out that the apparently easy method of raising them by government fiat is the wrong way and the worst way.
This is perhaps as good a place as any to point out that what distinguishes many reformers from those who cannot accept their proposals is not their greater philanthropy, but their greater impatience. The question is not whether we wish to see everybody as well off as possible. Among men of good will such an aim can be taken for granted. The real question concerns the proper means of achieving it. And in trying to answer this we must never lose sight of a few elementary truisms. We cannot distribute more wealth than is created. We cannot in the long run pay labor as a whole more than it produces.
The best way to raise wages, therefore, is to raise labor productivity. This can be done by many methods: by an increase in capital accumulation – i.e., by an increase in the machines with which the workers are aided; by new inventions and improvements; by more efficient management on the part of employers; by more industriousness and efficiency on the part of workers; by better education and training. The more the individual worker produces, the more he increases the wealth of the whole community. The more he produces, the more his services are worth to consumers, and hence to employers. And the more he is worth to employers, the more he will be paid. Real wages come out of production, not out of government decrees."
"If one sees in the wage earner merely a chattel and believes that he plays no other role in society, if one assumes that he aims at no other satisfaction than feeding and proliferation and does not know of any employment for his earnings other than the procurement of those animal satisfactions, one may consider the iron law as a theory of the determination of wage rates. In fact the classical economists, frustrated by their abortive value theory, could not think of any other solution of the problem involved. For Torrens and Ricardo the theorem that the natural price of labor is the price which enables the wage earners to subsist and to perpetuate their race, without any increase or diminution, was the logically inescapable inference from their untenable value theory. But when their epigones saw that they could no longer satisfy themselves with this manifestly preposterous law, they resorted to a modification of it which was tantamount to a complete abandonment of any attempt to provide an economic explanation of the determination of wage rates. They tried to preserve the cherished notion of the minimum of subsistence by substituting the concept of a 'social' minimum for the concept of a physiological minimum. They no longer spoke of the minimum required for the necessary subsistence of the laborer and for the preservation of an undiminished supply of labor. They spoke instead of the minimum required for the preservation of a standard of living sanctified by historical tradition and inherited customs and habits. While daily experience taught impressively that under capitalism real wage rates and the wage earners’ standard of living were steadily rising, while it became from day to day more obvious that the traditional walls separating the various strata of the population could no longer be preserved because the social improvement in the conditions of the industrial workers demolished the vested ideas of social rank and dignity, these doctrinaires announced that old customs and social convention determine the height of wage rates. Only people blinded by preconceived prejudices and party bias could resort to such an explanation in an age in which industry supplies the consumption of the masses again and again with new commodities hitherto unknown and makes accessible to the average worker satisfactions of which no king could dream in the past."
"This [minimum wage] legislation, passed by the 81st Congress at its first session, is an important addition to the laws we live by. It is a measure dictated by social justice. It adds to our economic strength. It is founded on the belief that full human dignity requires at least a minimum level of economic sufficiency and security."
"Until 1933 the objective of providing for the general welfare had been implemented primarily through State and Federal legislation to foster and protect business enterprise. There had been few successful attempts before 1933 to protect our people as individuals. Even the first Federal attempt to provide a floor under wages in various industries failed when the National Industrial Recovery Act was declared unconstitutional in 1935. We felt, however, that a government which could, for example, protect business from the unfair competition of monopolistic practices was not powerless to protect the individual from the social and economic evils of low wages. Therefore, we enacted, in 1938, a Federal wage-hour law. In so doing, we declared our purpose to eliminate from the channels of commerce all competition based on labor practices detrimental to the health and well-being of the Nation's workers.
Three basic provisions were written into the statute to achieve that goal. The law set a firm floor under wages. This meant that a man would no longer need relief money for food after he worked a full week. Then the law encouraged the spreading of employment by requiring overtime pay after a man worked 40 hours. No longer would one man toil 60 or 70 hours a week while another man was looking for a job. The law also sought to prevent the employment of boys and girls under 16 in industry. No longer was the world of tomorrow to be endangered by impairment of the health and curtailment of the educational opportunities of the youth of today.
This law was a great achievement. It had a highly beneficial effect upon our entire economy. Despite the prophesies of disaster, this law did not hurt business. On the contrary, it helped all segments of our population. When the test came, employers who had feared they could not stay in business under the law found, in fact, that they could successfully meet its requirements. The law added to the purchasing power of our lowpaid workers, and by encouraging the spreading of work put more people on payrolls. This law thus gave great impetus to the revival of our economy."
"This is the first time since the [Fair Labor Standards] act came into existence under the administration of President Franklin Roosevelt in 1938 that we have been able to expand the coverage. I don't believe that there's any American who believes that any man or woman should have to work in interstate commerce, in companies of substantial size, for less than a dollar twenty-five cents an hour, or fifty dollars a week. That itself is a very minimum wage, and I therefore want to commend the Members of the Congress in the House and the Senate, the Chairmen of the Subcommittees who were particularly involved, under the leadership of the House and Senate, for their untiring efforts.
I also want to commend the leaders of organized labor, the AFL-CIO, who are here today with Mr. Meany, for their long interest. Every member, pretty much, of their unions is paid more than a dollar and a quarter, but they have been concerned about unorganized workers who have been at the bottom of the economic ladder who have not benefited from our growing prosperity in this country as a nation over the long number of years and who need our help."
"The thing that I particularly want to mention is then, as now, most of the enlightened members of organized labor have never been personally affected by the minimum wage laws. As a result of their bargaining, they have all, generally speaking, been above the minimum levels. But union after union and leader after leader in the workers' movement in this country have spent time to see that their colleagues and their fellow workers had the benefits of this legislation.
It is my humble pride as President to see that this declaration of decency has been made real in millions of lives and homes-for as we meet here this afternoon, a new minimum wage has become effective in this country. It will mean a great deal to a great many people--none of whom are here. It will help them to carry on."
"The minimum rate for most workers-those 30 million previously covered--becomes, today, $1.40 an hour. This still means less, for a year's work, than what we count as a poverty wage. But this brings minimum wages closer in line with minimum decencies than they have ever been before.
An additional billion dollars will go, this year, into those pay envelopes where it is needed most--and this will be for services rendered, for work performed.
If this means very small increases in prices--that we have heard a good deal about--and in costs--and I believe it does mean increases in both--the American people will accept this as a better answer than denying human beings a decent wage."
"H.R. 7935 would raise the wage rate to $2.00 for most non-farm workers on November 1 and 8 months later, would increase it to $2.20. Thus in less than a year, employers would be faced with a 37.5 percent increase in the minimum wage rate.
No one knows precisely what impact such sharp and dramatic increases would have upon employment, but my economic advisors inform me that there would probably be a significant decrease in employment opportunities for those affected. When faced with the decision to increase their pay rates by more than a third within a year or to lay off their workers, many employers will be forced to cut back jobs and hours. And the worker will be the first victim."
"Sharp increases in the minimum wage rate are also inflationary. Frequently workers paid more than the minimum gauge their wages relative to it. This is especially true of those workers who are paid by the hour. An increase in the minimum therefore increases their demands for higher wages in order to maintain their place in the structure of wages. And when the increase is as sharp as it is in H.R. 7935, the result is sure to be a fresh surge of inflation.
Once again, prudence dictates a more gradual increase in the wage rate, so that the economy can more easily absorb the impact."
"The minimum wage destroys the best kind of training programs we’ve ever had: on-the-job training. The main way people have risen in the labor force is by getting unskilled jobs and learning things. Not merely technical skills: They learn such things as being at a job on time, spending eight hours a day at a job rather than standing around on street corners, having a certain element of responsibility, letting their employer know when they’re not going to come in. All of those traits are very important. In an attempt to repair the damage that the minimum wage has done to traditional on-the-job training, you now have a whole collection of programs designed to take up the slack."
"How is a person better off unemployed at a dollar sixty an hour than employed at a dollar fifty? No hours a week at a dollar sixty comes to nothing. Let’s suppose there’s a teenager whom you as an employer would be perfectly willing to hire for a dollar fifty an hour. But the law says, no, it’s illegal for you to hire him at a dollar fifty an hour. You must hire him at a dollar sixty. Now, if you hire him at a dollar sixty, you’re really engaging in an act of charity. You’re paying a dollar fifty for his services and you’re giving him a gift of 10 cents. That’s something few employers, quite naturally, are willing to do or can afford to do without being put out of business by less generous competitors. As a result, the effect of a minimum-wage law is to produce unemployment among people with low skills. And who are the people with low skills? In the main, they tend to be teenagers and blacks, and women who have no special skills or have been out of the labor force and are coming back. This is why there are abnormally high unemployment rates among these groups."
"I first came into the labor force in 1941 when the minimum wage was 40 cents an hour, and that was my first job. And each time that we've tried to boost the lower level of salary for the most underpaid workers, there have been predictions of catastrophe. But each time, in [m]y opinion, the change has helped our Nation and its economic strength."
"But one of the barriers to more jobs for youth is the single minimum wage system, because the cruel truth is, while everyone must be assured a fair wage, there's no compassion in mandating $3.35 an hour for startup jobs that simply aren't worth that much in the marketplace. All that does is guarantee that fewer jobs for teenagers will be created and fewer young people will be hired.
So, we're proposing youth employment opportunity wage legislation that can create more than 400,000 new summer jobs for youth. Our bill would allow employers to hire young people at a lower minimum wage during the summer months. And our legislation would do this without displacing adults. The bill explicitly prohibits employers from displacing adults in order to hire youth at the summer wage."
"H.R. 2710 balances the widespread sentiment for an increase in the minimum wage with the very justifiable concerns of employers, particularly small businesses, about the effects of higher costs, and at the same time provides protection for young workers' job opportunities. On average, our growing economy has created a quarter million jobs a month, every month, for the last 7 years -- most of them in small businesses. By expanding and increasing the FLSA small business exemption, we have done much to preserve the admirable capacity of American entrepreneurs to grow from today's small employers into the larger employers of tomorrow. That is good for the economy; it is good for America's work force.
Similarly, increasing the tip credit will enhance job security for those so employed and increase job opportunity for those seeking such work."
"A general flat minimum-wage law for all industry is permissible, but I do not think that it is a particularly wise method of achieving the end. I know much better methods of providing a minimum for everybody. But once you turn from laying down a general minimum for all industry to decreeing particular and different minimum for different industries, then, of course, you make the price mechanism inoperative, because it is no longer the price mechanism which will guide people between industries and trades."
"Labor, in a market system, is just another commodity; the wage a man or woman can command has nothing to do with how much he or she needs to make to support a family or to feel part of the broader society. Some conservatives have managed to convince themselves that this poses no moral dilemma, that whatever is, is just. And one supposes that there are still unrepentant socialists who believe that one can do away with market determination of incomes altogether. But after a century marked by both the Great Depression--which basically ended unalloyed faith in markets--and the fall of communism, most people support some version of the welfare state: a system that is based on markets, but in which the government tries to prevent too unequal a distribution of income.
But how is that to be accomplished? The standard economist's solution, which is also the main way the U.S. welfare state operates, involves 'after-market' intervention: Let the markets rip, but then use progressive taxes and redistributive transfers to make the end result fairer. However, many liberals have always felt that this solution is unsatisfactory. Instead, they want to increase 'market' wages, notably through support of collective bargaining, and through the imposition of minimum wage standards.
The 'living wage' movement, which has attracted considerable support in several major U.S. cities, is a variant on this tradition."
"Now to me, at least, the obvious question is, why take this [living wage] route? Why increase the cost of labor to employers so sharply, which--Card/Krueger notwithstanding--must pose a significant risk of pricing some workers out of the market, in order to give those workers so little extra income? Why not give them the money directly, say, via an increase in the tax credit?
One answer is political: What a shift from income supports to living wage legislation does is to move the costs of income redistribution off-budget. And this may be a smart move if you believe that America should do more for its working poor, but that if it comes down to spending money on-budget it won't. Indeed, this is a popular view among economists who favor national minimum-wage increases: They will admit to their colleagues that such increases are not the best way to help the poor, but argue that it is the only politically feasible option."
"In short, what the living wage is really about is not living standards, or even economics, but morality. Its advocates are basically opposed to the idea that wages are a market price--determined by supply and demand, the same as the price of apples or coal. And it is for that reason, rather than the practical details, that the broader political movement of which the demand for a living wage is the leading edge is ultimately doomed to failure: For the amorality of the market economy is part of its essence, and cannot be legislated away."