The Federal Minimum Wage- The War on the Impoverished part 2

In this article I will not be writing about FDR's New Deal in its entirety, in this article I will be focusing on that onerous, (or odorous if you prefer), section of the Second New Deal entitled, "The Fair Labor Standards Act of 1938" and in particular the federal minimum wage. There are other parts of the New Deal I wish to dissect,
 but I will be dealing with different sections of it in separate articles.

On October 29, 1929 the roaring 20's came to an abrupt end with the stock market crash on Black Tuesday, and that end was closely followed by the Great Depression, which was without a doubt the bleakest time in our country's history. My grandmother left those dark times fearing every economic down turn, and went to her grave praying that no one would ever have to suffer times like that again.

Life during the Great Depression was nowhere near as pleasant as it is today in the Great Recession, we have many advantages today that were simply non-existent back then. During the Great Recession we have the food stamp program, which helps the neediest of our people provide at least some kind of sustenance for themselves and their families, during the Great Depression there was no such thing, and sometimes people paid with their lives for a scrap of food as they fought others over trash barrels as they tried to find at least something they could put in their child's belly for that day. People stood in longs lines hoping to get some kind of hand out to last them for that day or the next, and many people were uneven to get that little bit of help. Many people starved. became sick or froze to death. While there were some, (many of whom were women and pre-teen children), who were able to land jobs as day laborers in sweat shops that paid only pennies a day, barely enough to buy a loaf of bread and a few beans. Times were hopeless, and there was no end in sight. Life in the US, and the rest of the world for that matter, was far from an enjoyable experience during those years.

President Franklin Delano Roosevelt took office on March 4, 1933, and spent his first 100 days using the power of his executive order to make sweeping changes in the way the country was run, (most of which were incorporated into the New Deal), but in the wake of the recession of 1937, they proved only to be band-aid fixes to a hemorrhaging economy, much like the stimulus programs that are winding down now.

The goal of the Fair Labor Standards Act of 1938 was to force sweat shop owners to pay employees, (many of whom were women), enough to raise themselves above the crippling effects the economy had on their lives. Fair enough. It was a law passed with good intentions, but as you know, the path to hell is paved with good intentions. What the law did in actuality was force may employers to fire much of their workforce, and to cause inflation to rise high enough, (when factored in with the  war inflation of the 1940s), that the wages actually earned were worth less than the act ordered.

Our federal minimum wage is a very sneaky, and underhanded form of a VAT, (Value Added Tax), which causes costs to go up incrementally from raw material to finished product, (each time the minimum wage is raised), and of course the higher the price goes up, the more the states gain from sales taxes, which of course lowers the buying power of the US Dollar, ensuring those in poverty stay there.

Our Federal Minimum Wage is partially responsible for the US worker being uncompetitive in the international labor market, after all why would an employer want to hire an unskilled laborer in the US for $7.25 an hour, when he can pay a fraction of that amount to a laborer in Bangladesh, India, Malaysia, or China, unless he is forced to so by a nation refusing to buy foreign goods? Sorry couldn't help myself with that comment.

Simply put, Federal Minimum Wage is part of the War on the Impoverished because it stifles growth in the private sector. If there were no federal standard, potential employees and employers would have to come together on common ground to hammer out a wage agreement beneficial to both.
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