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The Federal Government Has No Constitutional Authority to Impose a Minimum Wage

Summary:
Talk of hiking the minimum wage at the national level has ramped up in recent weeks. With the Democrats controlling the House and the Senate, and Joe Biden in the White House, it seems increasingly likely that we’ll soon see a federal per hour minimum.In other words, it may soon be illegal to take a job that pays less than an hour.Of course, this is a horrible policy. Wages shouldn’t be “regulated.” You must suspend basic laws of economics to think otherwise. I talked in-depth about the economic problems with minimum wage laws during my Feb. 12 Friday Gold Wrap Podcast.Beyond the economic problems with minimum wage policy, there are constitutional issues when the feds try to implement it. In fact, the feds have no constitutional authority to impose wage controls at all.Federal

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Talk of hiking the minimum wage at the national level has ramped up in recent weeks. With the Democrats controlling the House and the Senate, and Joe Biden in the White House, it seems increasingly likely that we’ll soon see a federal $15 per hour minimum.

In other words, it may soon be illegal to take a job that pays less than $15 an hour.

Of course, this is a horrible policy. Wages shouldn’t be “regulated.” You must suspend basic laws of economics to think otherwise. I talked in-depth about the economic problems with minimum wage laws during my Feb. 12 Friday Gold Wrap Podcast.

Beyond the economic problems with minimum wage policy, there are constitutional issues when the feds try to implement it. In fact, the feds have no constitutional authority to impose wage controls at all.

Federal supremacists will quickly point to the commerce clause. But that constitutional argument for a federal minimum is as ignorant as the economic arguments.

When the Constitution was written and ratified, “commerce” did not mean “any and every economic activity.” Over time, the Supreme Court has applied that definition. In effect, politically connected lawyers on the federal payroll amended the Constitution to give the federal government power it was never intended to wield.

And today, as Justice Clarence Thomas pointed out in his dissent in the medical marijuana case , under the Court’s expansive definition of commerce-power, the federal government has “no meaningful limits.”

So, what did “commerce” mean in the founding era? Simply put, commerce pertained to trade – the act of exchanging goods. Commerce power also extended to regulation of the transportation system, shipping, and interstate and international waterways.

When researching his scholarly paper, , Rob Natelson scoured 17th and 18th century case law, legal works and legal dictionaries, as well as lay usage of the word. His research showed commerce was almost exclusively used in connection with trade – not the broader range of economic activities the Supreme Court uses. Commerce included “buying and selling products made by others (and sometimes land), associated finance and financial instruments, navigation and other carriage, and intercourse across jurisdictional lines.”

Natelson wrote:

Commerce was never intended to give the federal government the power to regulate manufacturing, agriculture, labor laws, health care, or a host of other activities claimed by federal supremacists of all stripes.

When it comes to regulating “trade” across state lines, the commerce clause does give the federal government significant power, but the purpose for delegating that power was quite limited.

James Madison explained the intent of the commerce clause in a letter to J. C. Cabell dated February 13, 1825. He acknowledged that a broader delegation of power is implied by listing the power to regulate interstate commerce and foreign commerce together, but insisted that was not the intent.

The bottom line is the federal government was never intended to micromanage the economy through wage laws, labor laws, agricultural regulations, industrial regulations, healthcare laws and the like. Those powers were left to the states and the people. When the federal government regulates the economy and it does not directly relate to trade, it is usurping power and violating the Constitution.

Simply put, Uncle Sam doesn’t have the authority to tell you that you can’t work for $14 an hour. This isn’t regulating commerce. It’s usurping power.

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The Federal Government Has No Constitutional Authority to Impose a Minimum Wage

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