It’s time to embrace minimum wage federalism.
As minimum wage increases take effect in states and cities, there is a bright side for wage-floor skeptics. Not only is Washington, D.C. becoming less relevant in the wage debate, but these real-world policy experiments may help shift the conversation from intentions to results. In fact, people on both sides of the wage issue would benefit from Congress getting out of it altogether. The time has come to abolish the national minimum wage and leave the issue to the states.
President Obama wants to do just the opposite. In his 2014 State of the Union address, he endorsed an effort to raise the national wage mandate to $10.10 per hour. This would trump nearly all current state and local laws. While forced uniformity may sound fair, the effects of a one-size-fits-all wage policy would vary dramatically for both workers and employers based on the cost of living in various parts of America.
The attempt by Beltway liberals to re-nationalize the wage issue may also harm their own political allies. Grassroots advocates for higher local and state minimum wages are on a winning streak. Moving the debate to Congress will make those local activists and their efforts less relevant, shifting the locus of political action from Main Street to K Street.
On the other hand, keeping the debate at the state level means some states will keep their legal wage floors low. If Congress gets out of the way, a few states could have no mandated minimum wage at all. These policies, no less than wage floor increases, would represent the policy outcomes of democracy.
Leaving wage debates to the states invariably means each side will win some and lose some. This diversity of outcomes means policymakers and the public might actually learn something. After all, the minimum wage debate revolves around relatively clear empirical questions. Advocates for a high minimum wage claim it will provide a net benefit to low wage workers and the entire economy. Skeptics say such policies sideline the most vulnerable and produce harmful economic drag.
So far, research findings on minimum wage policies are inconclusive. Each side clings to a few studies that point their way. If Congress got out of the way and allowed states a free hand to set wage policies, the result would be more and greater policy differences. The outcomes of these divergent policies would be easier to see and understand. More diversity would provide more information and thus a much more fruitful debate about this kind of government intervention.
Of course, this is how things are supposed to work in nearly all areas of domestic policy. Rather than national policy uniformity, the constitutional structure of federalism was designed to allow state-by-state policy diversity. It is worth noting that nothing in the text of the Constitution suggests Congress has the power to establish a national minimum wage.
According to the liberal Economic Policy Institute, 60 percent of American workers now live in states with a minimum wage higher than the wage dictated by federal law. The states are competent to enact their own wage policies. Congress should repeal the federal wage floor and leave states fully free to enact, and to learn from, different policy choices.
Trent England is the National Coordinator for the Liberty Foundation of America. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions for editorials, available at this link.
