posted by Christopher Swope
Maryland's legislature continued its pro-labor tear this week by voting to raise the state's minimum wage to $6.15 an hour. I'll leave aside for now the usual arguments--the one labor makes about how hard it is to live on the federal minimum of $5.15, and the one business makes about how many jobs will be lost as a result of the higher wage.
Rather, what I'd like to discuss is why state legislatures choose to have this debate over and over and over? There is a simple solution to the minimum wage question, one that only three states (corrected below) have had the sense to put in place.
That is to index the minimum wage for inflation.
Indexing has two upsides. First, it assures that wages, at the very least, keep pace with what food costs at the grocery store. Second, there's a political benefit. Indexing means that legislatures (or Congress, for that matter) wouldn't be forced to re-visit the minimum wage every few years as its purchasing power erodes.
According to this U.S. Labor Department roundup, only Oregon, Vermont and Washington State have indexed their minimum wages. Why don't more states do the same?
My own theory is that lawmakers actually enjoy waging war over the minimum wage. Holding this debate every few years gives Democrats an opportunity to wave the flag for labor, and gives Republicans a chance to do the same for business. Win or lose, both sides energize their base of supporters--and probably win some campaign checks, too.
Am I just a hopeless cynic?
CORRECTION: Indexing isn't just for Blue States. Florida voters passed a constitutional amendment in 2004 creating a minimum wage, set then at $6.15 an hour, indexed for inflation. Consequently, the minimum was raised to $6.40 on January 1, 2006.