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Minimum Wage, Maximum Intervention

January 1, 2005

Thousands of workers in five states and the District of Columbia are getting a raise today, but not because of the generosity of their employers or because they have suddenly become more productive. That relic from FDR’s New Deal, the minimum wage, increases today in the District of Columbia and the states of Illinois, New York, Oregon, Vermont, and Washington. Twelve states (Alaska, California, Connecticut, Delaware, Hawaii, Illinois, Maine, Massachusetts, Rhode Island, Oregon, Vermont, & Washington) and the District of Columbia already had minimum wages higher than the federal minimum wage. The increase in the minimum wage in New York makes it the thirteenth state to have a minimum wage that exceeds the federal minimum of $5.15 an hour.

In addition to states, many cities have passed “living wage” laws, which set higher minimums for workers employed by city contractors. Voters in my state of Florida recently overwhelmingly approved a constitutional amendment to increase Florida’s minimum wage to $6.15 per hour. However, rather than beginning on January 1, 2005, the amendment stipulates that the change in the minimum wage is to take place six months after the amendment’s enactment, which was on November 2, 2004. Florida also joins Oregon and Washington as the only states to index their minimum wage to inflation.

Supporters of the minimum wage act like people would still be working for the original 25 cent an hour minimum without government intervention. They fail to realize that minimum wage laws infringe upon what should be the right of an employer and an employee to make whatever wage agreement they choose. Minimum wage laws also foster the notion that everyone should be paid the same if they do the same job for the same amount of time. The details on minimum wage laws in the states are available on the U.S. Department of Labor website. However, it has not been updated yet to reflect the new changes in the minimum wage laws in the abovementioned states. Information on the changes that take effect on January 1, 2005 is available here.

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