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Let the States Decide

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The federal minimum wage was instituted by the Fair Labor Standards Act of 1938. The rate was initially set at $0.25 an hour. By 1961, it had quadrupled to $1.00 an hour. The federal minimum has been at $7.25 an hour since 2009 — the result of the Fair Minimum Wage Act of 2007 that raised the federal minimum wage in three steps from $5.15 per hour to $5.85 per hour in 2007, to $6.55 per hour in 2008, and finally to $7.25 per hour on July 24, 2009. However, states are perfectly free to enact a higher minimum wage in accordance with their constitutions.

Currently, twenty-nine states and the District of Columbia have minimum wages that are above the federal minimum. Higher state minimum wages range from $7.50 in Maine and New Mexico to $10 an hour in California and Massachusetts. Thanks in part to automatic cost of living–increase provisions, fourteen states began the new year with higher minimum wages. The minimum wage in Washington, D.C., increased to $11.50 an hour on July 1. The states of Maryland ($9.25) and Minnesota ($9.50) also just recently increased their minimum wages. This is a trend that is sure to continue because of much agitation around the country for a $15 per hour minimum wage by groups such as Fight for 15 and 15 Now. Two states have already passed legislation to gradually raise their minimum wages to $15 an hour: California, effective January 1, 2022, and New York, effective December 31, 2018. Several cities have their own minimum-wage laws and have already increased their minimum wage above their state levels, some to $15 an hour.

Former Democratic presidential candidate Bernie Sanders — a Vermont senator and self-proclaimed socialist — has steadfastly called for an increase in the “starvation” federal minimum wage of $7.25 to a “living wage” of $15 an hour. The Democratic presidential nominee, Hillary Clinton, believes that “we are long overdue in raising the minimum wage.” Although she initially argued for an increase to just $12 an hour, after continued pressure from Sanders, she eventually began to talk about an increase to $15 an hour. As reported by the Huffington Post, “In an interview on ABC’s ‘This Week’ with George Stephanopoulos, Clinton said she would sign a $15 minimum wage bill put forth by Democrats if it had certain stipulations in it. The new wage floor would have to be phased in gradually and the effects of the hike would have to be evaluated in areas with lower costs of living.”

Only one of the original Republican presidential candidates consistently expressed support for increasing the federal minimum wage: Rick Santorum. Ben Carson originally said he was in favor of increasing it but then recanted. Donald Trump has progressed in the other direction. Last fall, during an appearance on MSNBC’s Morning Joe, Trump asserted that having a low minimum wage was “not a bad thing for this country.” During a Republican presidential debate late last year, Trump said of the minimum wage that “we have to leave it the way it is.” But after winning the Indiana primary in 2016, he softened his opposition to an increase in the minimum wage. When asked by CNN whether he would consider an increase in the minimum wage, Trump replied that he was “looking at that” and “open to doing something with it.” He emphasized that he was “actually very different from most Republicans” on the issue. Soon after that, on NBC’s Meet the Press, Trump had the following exchange with the show’s host, Chuck Todd, about the minimum wage:

TODD: Minimum wage. Minimum wage. At a debate, you know. You remember what you said. You thought you didn’t want to touch it. Now you’re open to it. What changed?

TRUMP: Let me just tell you, I’ve been traveling the country for many months. Since June 16th I’m all over. Today I’m in the state of Washington, where the arena right behind me, you probably hear, is packed with thousands and thousands of people. I’m doing that right after I finish you. I have seen what’s going on. And I don’t know how people make it on $7.25 an hour. Now, with that being said, I would like to see an increase of some magnitude. But I’d rather leave it to the states. Let the states decide. Because don’t forget, the states have to compete with each other. So you may have a governor —

TODD: Right. You want the fed — but should the federal government set a floor, and then you let the states —

TRUMP: No, I’d rather have the states go out and do what they have to do. And the states compete with each other, not only other countries, but they compete with each other, Chuck. So I like the idea of let the states decide. But I think people should get more. I think they’re out there. They’re working. It is a very low number. You know, with what’s happened to the economy, with what’s happened to the cost. I mean, it’s just — I don’t know how you live on $7.25 an hour. But I would say, Let the states decide.

Note that three times Trump said about the minimum wage, “let the states decide.” Now, Trump is not a constitutional scholar any more than he is a champion of federalism, but what he said about the states’ deciding on a minimum wage is the key to shrinking the federal leviathan and restoring the republic created by the Founders.

The Constitution

Constitution Week and Constitution Day are celebrated during the month of September each year.

The observance of Constitution Week runs from September 17 to September 23. The Daughters of the American Revolution petitioned Congress in 1955 to set aside the week to commemorate “America’s most important document.” Congress passed a joint resolution to that effect, and it was signed into law on August 2, 1956, by Dwight Eisenhower.

“I am an American Day” was designated by Congress in 1940 to be the third Sunday in May. In 1952, this observation was moved to September 17 and renamed “Citizenship Day.” In 2004, it was repackaged by an amendment to an omnibus spending bill as “Constitution Day and Citizenship Day.” However, the emphasis is on the Constitution. The new law requires the head of each federal agency or department to provide “each new employee of the agency or department with educational and training materials concerning the U.S. Constitution as part of the orientation materials provided the new employee” and “educational and training materials concerning the U.S. Constitution to each of its employees on September 17 of each year.” It also requires “each educational institution that receives Federal funds for a fiscal year to hold an educational program on the U.S. Constitution on September 17 of such year for its students.”

This date was so designated because it is the anniversary of the signing of the U.S. Constitution in 1787. The Constitution was written by the delegates from twelve states to the Philadelphia Convention, which met from May 25 to September 17, 1787. The Constitution was sent to the states for ratification on September 28, 1787. On December 7, 1787, Delaware became the first state to ratify the Constitution. The ninth state needed for ratification was obtained on June 21, 1788, when New Hampshire ratified. After Virginia (June 25) and New York (July 26) also ratified the Constitution in 1788, the Confederation Congress passed a resolution on September 13, 1788, to put the new Constitution into effect. The operation of the new government under the Constitution began on March 4, 1789. That is why the terms of the president, vice president, and members of Congress used to begin on March 4 instead of beginning in January as they do now, as so designated by the Twentieth Amendment ratified in 1933.

The United States was set up as a federal system of government where the states, through the Constitution, granted a limited number of powers to a central government — not the other way around. As James Madison succinctly explained in Federalist No. 45,

The powers delegated by the proposed Constitution to the Federal Government, are few and defined. Those which are to remain in the State Governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will for the most part, be connected. The powers reserved to the several States will extend to all the objects, which, in the ordinary course of affairs, concern the lives, liberties and properties of the people, and the internal order, improvement, and prosperity of the State.

There are about thirty enumerated congressional powers listed throughout the Constitution. Everything else is reserved to the states — even without the addition of the Bill of Rights and its Tenth Amendment.

Most of those powers are found in the eighteen paragraphs of Article I, Section 8. One concerns commerce. One concerns naturalization and bankruptcies. One concerns post offices and post roads. One concerns copyrights and patents. One concerns federal courts. One concerns maritime crimes. One concerns the governance of the District of Columbia. Four of them concern taxes and money. Six concern the militia and the military. The last one — the “elastic” clause — gives Congress the power “to make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers.”

Elsewhere in the Constitution we read that Congress may also admit new states into the Union, propose amendments to the Constitution, regulate national elections, establish courts inferior to the Supreme Court, direct the location of the place for the trial of a crime not committed within a state, declare the punishment for treason, provide the manner in which the public acts and records in each state are accepted by the others, dispose of and regulate the territory or other property of the United States, give the states consent to lay imposts or duties on imports or exports, and provide for the case of the removal, death, resignation, or inability of the president or vice president.

The minimum wage again

The arguments against the minimum wage are many and varied, and have been made by economists of every political persuasion. The simple fact that minimum-wage laws violate freedom of contract by infringing upon the right of an employer and an employee to make whatever wage agreement they choose is sufficient to oppose the government’s setting a minimum wage. But in keeping with the scope of this article, the question must be asked: Is it constitutional for the federal government to establish a minimum wage? The answer is that it is certainly not constitutional for the federal government to do so. The Constitution clearly contains no mention of a minimum wage. That in and of itself should end the discussion. But that’s not all. The Constitution doesn’t authorize the federal government to set maximum or minimum prices on anything, establish wage and hour standards, decree how many hours should be in the work week, regulate overtime pay, mandate family leave, or even have a Department of Labor.

Since the United States has a Constitution and a federal system of government, since the powers “which are to remain in the State governments are numerous and indefinite,” since the powers “reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State,” and since the Tenth Amendment says that “the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people”—if there is to be a minimum wage, then it is up to the states to decide to institute it, make exceptions to it, establish penalties for noncompliance with it, and raise or lower it in response to inflation, economic conditions, the cost of living, the Consumer Price Index, or simply political pressure.

Twenty-nine states have minimum wages that are above the federal minimum. Sixteen states have a minimum wage equal to the federal minimum. Five states have established no minimum wage. There is no question that things might be quite different if a federal minimum wage had never been established. Is it a good thing if the states establish minimum wages? Not at all. All of the economic and philosophical arguments against the federal minimum wage apply equally to state minimum wages. Without a federal minimum wage, libertarians would just as strongly object to any minimum wage instituted by a state, county, or city. The point is simply that to support a federal minimum wage is to oppose the Constitution and the federal system of government of the United States.

Other issues

It is not just on the issue of the minimum wage that the states should decide. There are a whole host of things the federal government is involved in that it shouldn’t be. To illustrate, I want to briefly mention seven of them.

The drug war. Although many states have legalized marijuana for medical purposes and a handful have legalized marijuana for recreational use, the federal government still classifies marijuana as a Schedule I drug, just as it classifies heroin and LSD. Yet, there is nothing in the Constitution that gives the federal government the authority to have a Controlled Substances Act, an Office of National Drug Control Policy, or a Drug Enforcement Agency, or to wage war against drugs.

Organ sales. The buying and selling of human organs for transplantation is currently illegal under federal law. The National Organ Transplant Act of 1984 outlawed the sale of organs and established the Organ Procurement and Transplantation Network. The authority for the federal government to do so is clearly not constitutional.

Public education. Although every state operates a public educational system from grade school to the university level, the federal government is heavily involved in regulating and funding education through the Elementary and Secondary Education Act, Pell Grants, student loans, and the Department of Education. Yet, the Constitution doesn’t authorize the federal government to have anything to do with education.

Gun control. In spite of the Second Amendment, the federal government has a myriad of gun-control laws. It also licenses gun dealers, operates the National Instant Criminal Background Check System, and has a Bureau of Alcohol, Tobacco, Firearms, and Explosives. But, of course, the federal government has no constitutional authority whatsoever to do any of those things.

Health care. In addition to the federal government’s socialized medical programs such as Medicare, Medicaid, and SCHIP, it also funds vaccination programs, HIV/AIDS-prevention initiatives, clinical trials, medical research, and federal laboratories; has medical-licensing, medical-records, and insurance laws; and regulates medical devices, drugs, medical schools, hospitals, nursing homes, and physicians. The Constitution doesn’t authorize the federal government to have or do any of those things, any more than it authorizes the federal government to have a Food and Drug Administration, National Institutes of Health, or Department of Health and Human Services.

Welfare. The federal government’s welfare system includes roughly 80 means-tested programs that provide cash, food, housing, and social services to poor and lower-income Americans. But since the Constitution nowhere authorizes the federal government to set up any of those programs — and certainly not to take money from some Americans and give it to other Americans — providing welfare is an illegitimate function of the federal government.

Social Security. This is not only a relic of Roosevelt’s New Deal, it is now the most expensive item in the federal budget. But since the Constitution nowhere gives the federal government the authority to institute a retirement plan; a safety net; an insurance program; a savings account; an investment account; or an intergenerational, income-transfer, wealth-redistribution program, Social Security is also an illegitimate function of the federal government.

It doesn’t matter what any American personally thinks about the minimum wage or any of those other issues. Under the U.S. Constitution and federal system of government, it is up to the states to decide them. The federal government should have nothing to do with any of them. Now, that doesn’t mean that the states should set a minimum wage. The states shouldn’t set a minimum wage, any more than they should wage war against drugs, forbid organ sales, provide public education, have gun-control laws, provide health care, write welfare checks, or have a retirement program akin to Social Security. And it doesn’t mean that the federal government should tax all Americans so it can send block grants to the states to do those things. But the first step toward shrinking the federal leviathan and restoring the republic created by the Founders is to let the states decide them, not the federal government.

This article was originally published in the September 2016 edition of Future of Freedom.