It took a quarter-century for America to establish the minimum wage in 1938. It quickly became one of the most popular things governments do. So why hasn’t Congress raised the minimum wage in more than a decade? Because economists are divided about its impact. But the reason citizens support a higher minimum wage may have nothing to do with economics. It may be about fairness.
A big reason the Covid-19 pandemic of 2020 did not cause an economic collapse is because of unemployment insurance, which tided families over until the economy began its revival. Actually, this isn’t anything new for unemployment insurance, which has served as an “automatic stabilizer” for the American economy since 1935. It’s also a good example of how states and the federal government work together.
If you’ve ever opened a bank account or invested in the stock market, you can thank government for making these everyday investments secure. When did the government get into the business of keeping Wall Street honest and banks sound? During the greatest economic calamity of the past century, the Great Depression of the 1930s. Here’s how the federal government created its regulatory structure, public corporations and banks accepted it, and we have all benefited as a result.
At the start of the Great Depression, 90 percent of farm families had no access to electricity. President Franklin Roosevelt solved the problem with an ingenious system of finance and self-help, and brought modern comforts to millions. We have a similar problem today in large sections of the country that have no high-speed connections to the internet, isolating families and throttling small-town economies. We can thank government for turning on the lights in the 1930s. We’ll need it to step up again a century later.
Social Security was a “simple and elegant” solution to the Great Depression, a system of direct relief for elderly people that felt like a pension and was financed by workers and their employers. It has gone on to become the federal government’s most popular program with young and old alike, and the most effective anti-poverty program in American history. If you are one of Social Security’s 68 million recipients—or hope to be as you get older—you can thank government for it.