“No Business [That Pays Less Than a Living Wage]…Has Any Right to Continue”—Changing Rhetorics of the Minimum Wage, 1933–1981

Abstract

This paper examines how the contemporary politics of the minimum wage came to focus on whether the minimum wage kills jobs. It begins by showing that the debates over the minimum wage shifted from an initial rhetoric in the 1930s that accepted the inevitability and in some cases desirability of unemployment in order to eliminate child labor and sweatshops and reconstruct the economy along high wage lines, to one where the existence of minimum wage–caused unemployment was called into question. Policymakers in the Department of Labor borrowed from the newfound authority of economics in the post-war American state to make the argument for substantial increases to the minimum wage in the 1950s and 1960s because they found that it had no negative effect on employment, but in so doing lashed the fate of the minimum wage to the empirical question of whether or not the minimum wage resulted in lower employment. In the 1970s and 1980s, the fate of the minimum wage was bound up by the question of the impact of the minimum wage on teenage employment. A new wave of external research by economists questioned the rosy findings of Department of Labor experts, pointing to teenagers as potentially bearing the economic brunt of minimum wage increases. This debate would be hashed out in the 1981 Minimum Wage Study Commission, as economic theory and policy rhetoric came together in the same place.