In 1999, Congress for the first time, is debating a federal minimum wage hike that will affect low-skilled people who have dramatically fewer options if they cannot find work. This public policy debate has been occasioned by the new state focus on welfare reform that, to some, suggests that a state flexibility approach be applied to the minimum wage, with the federal government insuring against a rollback of the current wage floor. In this view, Congress should grant governors authority over their own labor markets to match their new responsibility for creating employment opportunities for those who have great difficulty getting hired. The state flexibility proposal is composed of two elements: a wage hike to $6.15 per hour, phased in over 3 years; and state flexibility: any state without a minimum wage law would be subject to the federal minimum wage, whereas any state that has its own minimum wage law would retain the current rate of $5.15 and would be exempt from future federal rate increases. If this legislation were enacted, each state with a minimum wage law in place would have four options: (1) raise the state wage at the pace of the federal rate; (2) keep the state rate constant at its current rate; (3) raise the state rate but more slowly than the federal rate hike; or (4) raise the state rate higher or more quickly than the federal rate hike. Research shows that the public strongly favors state, rather than federal, control of the minimum wage rate, and application of the state flexibility approach would encourage evolution of smaller government and encourage job growth for the least skilled workers, according to the proponents of the proposed policy. Nowhere has the shift of federal control to the state level been more aggressive than in the field of education and job training. The Education Flexibility Partnership Act (1999) provides states with flexibility in spending federal education dollars and increases state accountability for educational achievement. (KC)