The State of the Union Then and Now: Raising the Minimum Wage is Still a Good Idea

Jan 29, 2014David B. Woolner

Decades after FDR called for a national minimum wage, the debate continues -- and his arguments for it still ring true.

We have not only seen minimum wage and maximum hour provisions prove their worth economically and socially under government auspices in 1933, 1934 and 1935, but the people of this country, by an overwhelming vote, are in favor of having the Congress—this Congress—put a floor below which industrial wages shall not fall, and a ceiling beyond which the hours of industrial labor shall not rise. – Franklin D. Roosevelt, State of the Union Address, January 3, 1938

In calling for an increase in the minimum wage in his State of the Union address, President Obama may have unwittingly echoed Franklin D. Roosevelt. For it was in the sixth year of FDR’s presidency, in the annual message to Congress that FDR delivered on January 3, 1938, that Roosevelt reiterated his increasingly vehement call for the passage of the Fair Labor Standards Act—the very law that would establish the national minimum wage.

In proposing the legislation, FDR used many of the same arguments that President Obama used to counter the conservative opposition that insisted—much as the conservative right does today—that the federal government has no business trying to increase the purchasing power of the average worker, and that the enactment of a national minimum wage law would hurt business and increase unemployment. Opposition in the largely non-union and racially segregated South—where there was a huge differential between the wages of white and black workers—was especially intense, and thanks to the actions of Southern Democrats in both the House and Senate, who had joined with conservative Republicans in the formation of an anti-New Deal coalition, passage of the Fair Labor Standards Act was not going to be easy.

To counter these arguments, FDR appealed, as he often did, to the moral sensibilities of the American people, insisting that government had “a final responsibility for the well-being of its citizenship” and this included enacting “legislation to end starvation wages and intolerable hours.” Furthermore, there were sound economic reasons to pass wage and hours legislation. In an earlier address on the subject, using language that is especially relevant to President Obama’s call for an increase in overseas exports, FDR observed that:

American industry has searched the outside world to find new markets—but it can create on its very doorstep the biggest and most permanent market it has ever seen… A few more dollars a week in wages, a better distribution of jobs with a shorter working day will almost overnight make millions of our lowest-paid workers actual buyers of billions of dollars of industrial and farm products. That increased volume of sales ought to lessen other cost of production so much that even a considerable increase in labor costs can be absorbed without imposing higher prices on the consumer. I am a firm believer in fully adequate pay for all labor. But right now I am most greatly concerned in increasing the pay of the lowest-paid labor—those who are our most numerous consuming group but who today do not make enough to maintain a decent standard of living or to buy the food, and the clothes and the other articles necessary to keep our factories and farms fully running.

Interestingly, a group of over 600 economists, including seven Nobel laureates, recently issued an open letter calling on President Obama and the congressional leadership in both parties to raise the minimum wage, arguing, as FDR did, that “the weight of evidence” shows that an increase in the minimum wage will “have little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market.”

It seems incredible that we should still be locked in the same debate about the moral and economic impact of an increase in the minimum wage more than three-quarters of a century later, at a time when even the McDonald’s Corporation had to admit after its own internal analysis that its minimum-wage workers could not survive on what they were receiving without the addition of a second job.

In 1938, Franklin Roosevelt argued that if we want to move “resolutely to extend the frontiers of social progress, we must… ever bear in mind that our objective is to improve and not to impair the standard of living of those who are now undernourished, poorly clad and ill-housed.” The Fair Labor Standards Act, which was signed into law on June 25, 1938, has helped improve the lives of millions of American workers—especially those at the bottom rung of the income scale—through its recognition of need to establish a minimum wage and through the provision that provides time and a half for overtime work. But in order for the law to be effective and have meaning, the minimum wage must keep up with the cost of living, and, as President Obama noted in last night’s address, the real wage of the average American worker has been in decline for decades when adjusted for inflation.

If Congress is serious about improving and not impairing the lives of the millions of working poor in this country, then it is high time to heed the president’s call to “give America a raise” and increase the minimum wage. To fail to do so would be yet another example of the callous indifference—most recently exemplified by the failure of Congress to extend long-term unemployment benefits—that those in positions of wealth and power have shown for the plight of the millions of Americans who struggle day by day to get by on wages that force even those working full-time to live a life of poverty. Indeed, the inability or unwillingness of this Congress to act on behalf of the most vulnerable in our society brings to mind the words of the late Pete Seeger, who died this week, when he sang, “which side are you boys, which side are you on?”

David B. Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. 

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