previous increase. Support was once again building
for an adjustment. In the years since the minimum
wage had last been raised, the political environment
had changed. The Democratic Party now controlled
the White House and the Republican Party con-
trolled Congress. Despite being in the minority, con-
gressional Democrats were able to build sufficient
support for raising the minimum wage, which was ap-
proved by President Bill Clinton. The legislation
again involved a two-stage increase. The first oc-
curred on October 1, 1996, raising the wage to $4.70
per hour. The second increase on September 1, 1997,
raised the wage to $5.15. A $4.25 training wage for
ninety days was included for new hires under age
twenty. Although the increase represented a real gain
over the earlier increase, the real value of the new
minimum wage was still less than it had averaged dur-
ing each of the previous three decades.
In addition to the federal minimum wage, states
have the right to set a higher minimum wage. Dur-
ing the 1990’s, a number of states had a minimum
wage above the federal one. This differs slightly from
the policy in Canada, where there is no federal mini-
mum wage and each province and territory has the
authority to set its own minimum wage.
Minimum Wage Debate The movement to increase
the minimum wage during the 1990’s received wide
support from the public but still faced serious chal-
lenges in getting implemented. The main argument
against raising the minimum wage was based on the
classical economics view that a government-imposed
wage rate above the market wage rate will reduce the
number of available jobs because workers lack the
skills to justify higher wages. As a result, an increase
will hurt those it is intended to help. The primary ar-
gument for increasing the minimum was to be found
in the view that a full-time worker should be able to
raise a family without living in poverty.
Since most minimum-wage employees were found
to be part-time workers under age twenty-five, never
married, and living in households with incomes well
above the U.S. Census Bureau’s poverty threshold, it
was argued that increasing the minimum wage
would reduce employment opportunities for teen-
agers without having much impact on poverty.
However, research conducted following the in-
creases in the minimum wage during the 1990’s
found little evidence of its leading to increased un-
employment.
Welfare reforms aimed at reducing the number
of individuals receiving benefits implemented dur-
ing the Clinton administration strengthened argu-
ments that full-time work should keep families out of
poverty. The increases in the minimum wage during
the 1990’s were sufficient to keep a single individual
above the U.S. Census Bureau’s poverty threshold,
but not a family of three as it had during the 1960’s
and 1970’s.Impact The 1990’s provided minimum-wage work-
ers with their first increase since 1981. With in-
creases in prices during the intervening years, the
purchasing power of the minimum wage had fallen
to its lowest level in four decades. Since increases
in the minimum wage tend to also increase wages
for those earning slightly above the minimum, the
increases in the 1990’s represented a real gain for
millions of low-wage workers. Despite these gains,
however, the purchasing power of the minimum
wage for the decade was at its lowest level since the
1940’s.Further Reading
Ehrenreich, Barbara. Nickel and Dimed: On (Not)
Getting By in America. New York: Metropolitan
Books, 2001. A compelling look at one woman’s
sojourn into the world of low-wage work and the
struggles she encountered.
Levin-Waldman, Oren M.The Case of the Minimum
Wage: Competing Policy Models. Albany: State Uni-
versity of New York Press, 2001. A multidisciplin-
ary presentation of the forces that have shaped
minimum wage laws in the U.S.
Waltman, Jerold.The Case for the Living Wage. New
York: Algora Publishing, 2004. The book presents
a well-reasoned argument advocating the role
that the minimum wage could play in reducing
poverty.
_______.The Politics of the Minimum Wage. Urbana:
University of Illinois Press, 2000. A thought-
provoking look at the political maneuvering that
has guided and will likely continue to guide mini-
mum wage policy.
Randall HannumSee also Clinton, Bill; Income and wages in Can-
ada; Income and wages in the United States; Poverty;
Welfare reform.The Nineties in America Minimum wage increases 577