Why is the minimum wage included in a discussion of the welfare state? Because it is essentially a tax on employers that funds a redistribution of wealth that is mandated by the government. It is a welfare program in disguise.
From the perspective of the Democrats, increases in the minimum wage make for excellent politics, for two reasons. First of all, the disguise typically works; the recipients of the increase do not feel like welfare queens, since they do not receive a check from the government. Second, the wealth redistribution is tied directly to work, which satisfies the inner Victorian in so many Americans. No one is getting cuts in line here. No wonder reactionary workers can be persuaded to vote for minimum wage referenda, and they actually have a fighting chance in red states.
Economically, while studies have consistently shown that fairly small minimum wage increases do not have a major impact on overall wage or employment levels, large increases probably would. Job losses, inflation, and higher interest rates would be a bad tradeoff in exchange for the higher wages. And why should employers be required to pay more than the market demands? If society insists that workers be paid a living wage, why shouldn’t the country as a whole pay for it–not just employers? Why aren’t wage subsidies a better answer?
As you can see, I’m ambivalent at best on this subject. For political reasons, I can tolerate promises of federal legislation increasing the minimum wage as long as the increase is kept reasonably low and regional variations are tolerated. A $15 dollar minimum wage might make some sense in Manhattan, but it will destroy jobs in Nebraska.
Will such a balanced program fly in the 2020 primaries? I have my doubts, but we’ll see.