Article main image
Nov 11, 2014

By John E. Thompson

Earlier this month, several states and localities voted in favor of increasing their minimum wage.

Right on cue, many (including U.S. Secretary of Labor Thomas Perez) seized upon these results as ostensibly supporting an increase in the federal Fair Labor Standards Act‘s rate to $10.10 per hour.

On the contrary, the developments emphasize that no such nationwide action is either wise or warranted.

Different areas, different views

The actual details of what occurred (as opposed to generalities about voting margins and states’ political leanings) reveal why leaving the matter to localized action is far more appropriate. For example, all of the states involved passed rates lower than the proposed FLSA level:

  • Alaska — $9.75 per hour (by Jan. 2016);
  • Arkansas — $8.50 (by Jan. 2017);
  • Nebraska — $9.00 (by Jan. 2016);
  • South Dakota — $8.50 (by Jan. 2015).

Furthermore, note that there is significant variation among these states as to when the rates will become effective.

On the other hand, two cities voted in favor of levels much higher than that sought under the FLSA:

  • San Francisco, California — $15.00 per hour (but not until July 2018);
  • Oakland, California — $12.25 (by March 2015).

But, last reports indicated that voters in Eureka, California have soundly rejected a measure to raise the rate there to $12.00.

The bottom line

Whatever one thinks about the wisdom of having any minimum wage, or about whether there really is a groundswell of public enthusiasm for higher rates, these substantial disparities even among supporters demonstrate that the one-size-fits-all, top-down, Washington-knows-best approach embodied in the FLSA is no longer the way to go.

Instead, voters and officials in states and localities are much better placed to judge on the basis of their own economies and other circumstances whether, by how much, and when to take such action.

If one jurisdiction or another makes a poor choice, then at least the effects will be limited to those who made it.

This was originally published on Fisher & Phillips’ Wage and Hour Laws blog.