Federalism and the Future of US Minimum Wage Policy

Abstract This article examines how federalism has shaped the development of minimum wages in the United States, and discusses implications for the future. I argue that federalism operates as both an opportunity structure and a containment structure for US wage standards, as it creates multiple overlapping policy venues as well as multiple veto points. These features of American federalism make it an inherently neutral but highly malleable tool that can be used to advance the opposing interests of business and labor. Countervailing expansionary and contractionary pressures in different parts of the federal system have contributed to interjurisdictional variation in not only basic minimum wages but also indexation, tip credits, and subminimum wages. These disparities will likely continue to widen in the future. The analysis sheds light on a broader debate on the promise and perils of decentralized policymaking.