The Minimum Wage and the "KInd of Country America Wants to Be"

Adam Cohen in yesterday's NYT on the 75th anniversary of the National Industrial Recovery Act and the minimum wage:

....

This week marks the 75th anniversary of the National Industrial Recovery Act — which Roosevelt signed June 16, 1933, at the end of his famous first 100 days — and of the federal minimum wage. It was a grudging, almost accidental win, and the road since then has been rocky. Advocates for low-income workers have had a hard time keeping the minimum wage at a reasonable level and passing other laws necessary to fulfill the original goal: ensuring that people who work hard can achieve a reasonable standard of living.

....

The Supreme Court declared the NIRA unconstitutional, but the idea of a federal minimum wage had taken hold. In 1938, Congress passed the Fair Labor Standards Act — which a more progressive Supreme Court upheld — creating a mandatory federal minimum wage.

The new law was enormously effective: within a year, it brought millions of low-paid workers up to a wage of 30 cents an hour. It also had major weaknesses, notably that it was not indexed to inflation. Congress has to raise it, which leaves low-income workers at the mercy of politics.

....

The minimum wage can play a vital role in lifting hard-working families above the poverty line. But as Roosevelt understood, it is also about something larger: what kind of country America wants to be. “A self-supporting and self-respecting democracy,” he said in the Congressional message that accompanied the Fair Labor Standards Act, can plead “no economic reason for chiseling workers’ wages.”

One way to think about the debate over the Wal-Mart economy is in narrow cost-benefit terms: do the benefits of the low prices provided by America's largest private employer exceed the costs of low wages and benefits? But I think the better way to think about it is in Rooseveltian terms: do we want to be a country of low retail prices, low wages, and Gilded Age inequality?