Tuesday, January 03, 2012

On the powers of government

Here's a story usually published in some form at the beginning of each year:

Eight states will ring in the New Year with a higher minimum wage, under state laws that require wage floors to keep apace with inflation. San Francisco, one of the few cities that sets its own minimum wage above the federal level, is also raising wages for the lowest-paid workers in the new year. It will become the first big city in the country to require companies to pay their workers more than $10 an hour.

That sign in the picture above is now obsolete.

I imagine most people reading this blog don't think much about minimum wages. I remain grateful that the Feds, states and cities try to set a floor. There needs to be some generally recognized level below which workers' compensation can be named as exploitative and just plain wrong. Perhaps surprisingly, I've observed that, however difficult efforts to raise minimum wages are in legislative settings, they pass pretty easily once put on the ballot. I suspect that the class of persons who vote can't imagine living on the pittance that is the "minimum" -- and few of them own restaurants or run employment services for home health aides trying to pay as little as possible.

In a year in which we are facing a Supreme Court decision on whether the Federal government can create a mandatory system of (semi-) universal health care provision, it might be instructive to look back at how minimum wages came to be. I'm drawing here on Freedom from Fear: The American People in Depression and War, 1929-1945, a volume I recently wrote about here.

During the presidency of Franklin Delano Roosevelt, the question of whether governments, state and federal, could mandate minimum wages repeatedly reached the Supreme Court. The Supreme Court repeatedly ruled a resounding "no" -- neither level of government was to be allowed the legal authority to tell business owners what to pay their workers. These decisions were emblematic of the great conflict of the era: could government use its powers to try to create a stable and sustainable economy or was it barred from meddling with property? FDR responded to these decisions with what he called a plan for "court reform" -- he would add judges to the Supreme Court, presumably judges who would approve the New Deal's economic agenda. Opponents won the war of political spin -- the plan is remembered as "court-packing" and was repudiated even by Roosevelt's friends. But then something surprising happened. David M. Kennedy's volume takes up the story:

Congress, including large elements of the president's own party, was by now in open rebellion against the Court-reform plan. The Court itself delivered the killing blows, though in laying Roosevelt's plan to rest it also opened a new constitutional era. On Easter Monday, March 29, the Court handed down an opinion in a case that at once tolled the knell for Roosevelt's proposal, even as it heralded the dawn of a judicial revolution. Like many great cases, this one had its origins in the commonest grit of everyday life. Elsie Parrish was a chambermaid who had swept rugs and cleaned toilets for nearly two years in the Cascadian Hotel in Wenatchee, Washington, a dusty farm town on the Columbia River plateau. Upon her discharge in 1935, she asked for $216.19 in back pay, which she was owed under the terms of a Washington State minimum wage aw enacted in 1913. West Coast Hotel Corporation, the Cascadian's parent company, offered to settle for seventeen dollars. Elsie Parrish sued for the full amount. The corporation thereupon challenged the constitutionality of the Washington law.

Chief Justice Hughes himself delivered the majority opinion in West Coast Hotel v. Parrish. The Court had decided in favor of Elsie Parrish, Hughes declared, speaking with Olympian authority in language that signaled a new willingness to defer to legislatures on economic matters. Slowly, the significance of Hughes's pronouncement sank in. Astonishingly, the justices had voted by a five-to-four majority to uphold the Washington State minimum wage law -- a statute effectively identical to the New York law that the same Court had invalidated by the same margin in Tipaldo only a year earlier!

The decision in Parrish amounted to "the greatest constitutional somersault in history," declared one commentator. "On Easter Sunday," said another, "state minimum wage laws were unconstitutional, but about noon on Easter Monday, these laws were constitutional." …Parrish dealt with a state law, not a federal one, but it proved a fateful harbinger. …The Wagner Act's [labor relations act] constitutionality depended on a broad construction of the commerce power, which the Court had been unwilling to recognize in its Schechter and Guffey Coal Act decisions. Now Hughes ignored those precedents, enunciated just months earlier by the same Court, and ruled that the Wagner Act fell within a constitutionally legitimate definition of the commerce power. …Just six weeks later, the same majority … voted to uphold the unemployment insurance features of the Social Security Act, and the even more comfortable majority of seven to two sustained the act's old-age pension provisions.

Roosevelt didn't have to pack the Court; the justices changed their minds. I find it improbable that our contemporary, oh-so-political, Supreme Court will put aside anti-government shibboleths in order to understand the Constitution is a way that allows government intervention in health care. But I could be wrong. Linda Greenhouse who knows more about the Supreme Court than most anyone after covering it for the New York Times for decades, dares predict that the justices will not narrow the government's powers in order to strike out against Obamacare. We'll see, won't we?

UPDATE: Here's this year's San Francisco Minimum Wage announcement:

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