by Ed Sawicki - November 15, 2020

The term wage theft describes when an employer does not pay an employee what he or she is due. I propose the term be expanded to cover the case where Congress fails to take action on setting the federal minimum wage to a living wage. This form of wage theft has been going on for several decades.

In recent years, there's been a call to raise the federal minimum wage. Senator Bernie Sanders and other Democrats have called for a $15 per hour minimum wage. Many Republicans oppose it with Senator David Perdue (R-GA) saying that raising the minimum wage will kill jobs. Perdue is not entirely wrong. Some big companies forced to raise salaries simply compensate by laying off enough people to get their balance sheet back to where it was. (This is another issue that Congress could fix if they wanted.)

While raising the minimum wage to $15 per hour would go a long way to solving the problem, it doesn't go all the way. The AFL-CIO says that if the minimum wage “had kept pace with workers’ productivity since 1968, the inflation-adjusted minimum wage would be $18.67.”

Raising the minimum wage fixes the problem now but what do we do about those lost wages for all those decades? Should the U.S. government offer reparations to workers?

The amount of money low-wage workers have been cheated out of depends on how far back in time we go. The Fair Labor Standards Act of 1938 seems like a good starting point since Congress and the Supreme Court at the time agreed on the legality of a minimum wage—though the Court had its arm twisted by FDR's threat of Court reform*. The Act set the wage too low even then—$0.25 per hour—equivalent to about $4.50 today. The lost wages since 1938 is probably a few trillion dollars (adjusted for inflation).

There's little appetite in Congress for paying reparations to Blacks or Native Americans but what about a class of people that spans skin color, heritage, and political persuation?

Maybe, instead of reparations, we'd settle for Medicare For All, free college, and subsidized child care.

* It would be nice to have a president who was willing to check the power of today's corrupt Supreme Court.

Additional reading

AFL-CIO: Raising the Minimum Wage

Wikipedia: Wage theft

The Intercept: Georgia’s Senate Runoff Will Determine Whether The Minimum Wage Increases, Sen. David Perdue, the former CEO of Dollar General, has said that raising wages kills jobs.

How FDR lost his brief war on the Supreme Court

Fair Labor Standards Act of 1938: Maximum Struggle for a Minimum Wage