Sen. Ron Johnson (R-Wisconsin) has suggested that he believes the federal minimum wage should be eliminated, and that the “marketplace” should be in charge of setting wages instead — a move that would send U.S. wage policy back to pre-World War II, when the federal minimum wage was first created.
In a debate with Democratic U.S. Senate candidate and Lieutenant Governor Mandela Barnes on Friday, Johnson claimed that raising the minimum wage would eliminate jobs — which economists have said is not true — and misleadingly compared the policy to “price fixing,” an anticompetitive practice typically done by corporations in coordination to raise prices of goods.
“I really don’t like the federal government getting involved in doing price fixing in anything and that includes wages,” he said.
He went on to claim that eliminating the minimum wage would create more competition and potentially higher wages, a statement that is patently false.
“If you have a strong economy which we had under the previous administration you had plenty of jobs and you had rising wages. I think something like $2,000 to $4,000 a year is what the average family increased their wage by,” he said. “So, that’s the best thing is have the marketplace take care of it rather than government set a minimum wage that then starts eliminating jobs.”
Johnson’s statements were misleading or false on numerous counts.
Eliminating the minimum wage — which was created in 1938 to protect workers and stabilize the economy — would allow corporations to pay workers extremely low wages. Corporations would almost certainly take advantage of this lack of regulation to disastrous effect for workers across the country. Even though the current federal minimum wage of $7.25 is not considered a competitive wage by any means in today’s job market, there are still hundreds of thousands of workers who are making such a wage, which is well under a living wage in every state in the U.S.
Notably, one in seven gig workers, or people working for companies like Uber and DoorDash, are making less than the federal minimum wage, the Economic Policy Institute found earlier this year. Corporations are allowed to exploit the fact that such workers aren’t classified as employees in order to not guarantee a minimum wage or provide benefits. The fact that these jobs exist and are still staffed is evidence that Johnson’s bad faith claim that wages would rise if there were fewer wage regulations is blatantly untrue.
Corporations may threaten to eliminate jobs as a political tactic if they are forced to wage raises, but economists resoundingly say that raising the minimum wage does not eliminate jobs in itself. Real world examples also show the same thing. In California, for instance, the minimum wage for businesses with more than 25 employees increased to $15 an hour this year. At the same time, the state has been posting some of the strongest job growth numbers in the wake of the pandemic job downturn of 2020.
And, while wages did grow under President Donald Trump, as Johnson said, their rate of growth was slower than it typically is; a 2020 study found that, in Wisconsin, wages only rose 6 percent during Trump’s first three years in office, compared to a 7.1 percent raise during President Barack Obama’s first three years in office. When inflation is taken into account, wages have remained stagnant for decades, while CEO pay has grown by nearly 1,500 percent since the late 1970s.
Barnes slammed Johnson for his attack on the minimum wage. “Ron Johnson — a multimillionaire who literally complained about only doubling his wealth as our Senator — said last night there should be NO federal limit on how low your wages can go,” Barnes wrote on Twitter on Saturday.
The federal minimum wage hasn’t been raised in 13 years. Accounting for inflation, the current $7.25 rate is the equivalent of $5.27 in July of 2009, when the rate was set — even lower than the rate of $6.55, which was the minimum wage before 2009. In sharp contrast to Johnson, Barnes says he supports raising the federal minimum wage to $15, a threshold that labor advocates have long called for.
We’re not backing down in the face of Trump’s threats.
As Donald Trump is inaugurated a second time, independent media organizations are faced with urgent mandates: Tell the truth more loudly than ever before. Do that work even as our standard modes of distribution (such as social media platforms) are being manipulated and curtailed by forces of fascist repression and ruthless capitalism. Do that work even as journalism and journalists face targeted attacks, including from the government itself. And do that work in community, never forgetting that we’re not shouting into a faceless void – we’re reaching out to real people amid a life-threatening political climate.
Our task is formidable, and it requires us to ground ourselves in our principles, remind ourselves of our utility, dig in and commit.
As a dizzying number of corporate news organizations – either through need or greed – rush to implement new ways to further monetize their content, and others acquiesce to Trump’s wishes, now is a time for movement media-makers to double down on community-first models.
At Truthout, we are reaffirming our commitments on this front: We won’t run ads or have a paywall because we believe that everyone should have access to information, and that access should exist without barriers and free of distractions from craven corporate interests. We recognize the implications for democracy when information-seekers click a link only to find the article trapped behind a paywall or buried on a page with dozens of invasive ads. The laws of capitalism dictate an unending increase in monetization, and much of the media simply follows those laws. Truthout and many of our peers are dedicating ourselves to following other paths – a commitment which feels vital in a moment when corporations are evermore overtly embedded in government.
Over 80 percent of Truthout‘s funding comes from small individual donations from our community of readers, and the remaining 20 percent comes from a handful of social justice-oriented foundations. Over a third of our total budget is supported by recurring monthly donors, many of whom give because they want to help us keep Truthout barrier-free for everyone.
You can help by giving today. Whether you can make a small monthly donation or a larger gift, Truthout only works with your support.