The real question about minimum wage laws

The minimum wage is an issue this campaign season, but there is a different approach I have not heard mentioned.  What if we could simultaneously try 50 different approaches and determine which approach is the most effective?

The federal minimum wage requirement was originally determined to be unconstitutional by the Supreme Court.  After FDR threatened to pack the Supreme Court with an additional six justices, the Supreme Court gave in to pressure and ultimately ruled the federal minimum wage constitutional. 

One thing unique to the United States is that it was set up as a confederation of different states.  Each colony had its own identity.  They gathered together in order to gain independence from Great Britain.  The federal government was set up by the states to do certain things it could do better than the states – for example, to conduct foreign policy and settle disputes among member states.  The states were not carved up by the federal government.  Per the original Articles of Confederation and the subsequent Constitution, the federal government was given a limited number of powers.  The states and local governments were the source of most laws and regulations, thus keeping government closer to the people.

In the developed world, some countries do not have a required minimum wage.  In 2014, seven European Union countries, Austria, Cyprus, Denmark, Finland, Germany, Italy, and Sweden, did not mandate a minimum wage.  A Cato study shows that unemployment rates were lower in the counties without a minimum wage than they were in the EU counties with a minimum wage.      

All but five states have their own minimum wage laws.  The ones who have them deal with them in a myriad of different ways.  Some states' minimums are higher; some are lower.  Some are more complex and treat different industries differently.   

The cost of living is different in every state.  In Hawaii, $15.00 will buy you the same amount of goods $6.60 will buy you in Mississippi.  In Massachusetts, $15.00 will buy you the same amount of goods $8.85 will buy you in Indiana.  A federal minimum wage does not treat each state equally.

The smallest state in population is Wyoming with over 500,000 residents.  That is more people than many countries.  Iceland has around 330,000.  Iceland has a wonderful first-world society.  It has good schools, good roads, good medical care, a police force, its own currency, and – guess what – no mandated minimum wage.  If a country as small as Iceland, with the limited natural resources it has, can function quite well without a minimum wage dictated to it from Washington, D.C., doesn't it make sense that Wyoming and the other 49 states can, too?

The debate about a federally mandated minimum wage should be about whether or not to abolish it rather than how high it should be.  You may say, "That'll never happen."  But if I had said back in 1980 that we would be debating who should be allowed in what bathroom in 2016, who would have believed it?

The first step is to get the conversation started.  The federal government should not dictate wage rates.  If government is to do it, the states can do it in a fairer manner.

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