America’s Minimum Wage in Comparative Perspective

• In Event: The Politics of Inequality in Polarized Contexts

Abstract

In comparative terms, the United States is an outlier when it comes to the minimum wage. While countries around the world raise the minimum wage on a regular basis, the U.S. Congress has raised the minimum wage only five times in the last fifty years. Why has the U.S. federal government raised minimum wages so infrequently? We argue that the frequency of minimum wage increases depends on whether legislative approval is necessary, as in the U.S., or if the executive branch determines the minimum wage. In systems like the U.S., where legislative approval is needed, multiple veto points often obstruct policy change. Here, partisanship and polarization also intensify the struggle to pass wage increases. In contrast, executive-controlled systems face no such hurdles, facilitating regular increases. To evaluate our arguments, we use a mixed-method approach. First, we conduct a comparative case study between the U.S. and Poland, showing that despite similar political climates with heightened polarization and shifting governments, these countries have experienced divergent minimum wage trends due to their different institutional settings. The U.S., riddled with multiple veto points, struggles to increase minimum wages. Conversely, Poland’s executive authority over wage determination enables strategic manipulation for electoral gains. Second, we test the generalizability of our argument utilizing a novel dataset on minimum wage policies in 155 countries and reveal that the institution that holds the final authority in minimum wage determination is the most important factor behind the frequency of minimum wage increases.

Authors

• Ibrahim Oker, Union College

• Teri L. Caraway, University of Minnesota, Twin Cities