Minimum Wage Does Not Impact The Poverty Rate

600 WordsApr 23, 20193 Pages
Minimum Wage Does Not Impact The Poverty Rate The Working Poor Gain Little Other than Protection In the 1930’s, during his second term as president, Franklin Roosevelt fought for and constructed many versions of legislation to end the exploitation of women and children. Finally on October 24, 1938 the Fair Labor Standards Act became effective. The Act limited the hired workers to be no less than sixteen, the work week to no more than forty hours and the minimum wage to be twenty-five cents an hour (Grossman, 1978). Proponents claimed the legislation was the start to socialism and that this would allow the government to control private businesses. Amazingly, the same arguments are reiterated today with the 2014 proposed increase.…show more content…
However, the minimum wage hikes are sold to the low-skilled workers, the studies show the hikes can equate to job loss or hours substantially reduced. Further, compounding income disparity or causing income losses and increased poverty. The net loss, the families of the low-skilled worker are not better off and in many cases, such as single mothers, worse off. (Sabia & Burkhauser, 2010 p 5) Providing a slightly more positive view but statistically insignificant, some low-skilled workers who remain employed tend to move toward the high side of the poverty level but not out (Neumark & Wascher, 2002). Reduced Jobs In economic times similar to what the U.S. has experienced from 2007 to 2014 the challenge of dropping a twenty-five plus percent minimum wage increase is detrimental to small business profitability. In 2012 addition of Business Week the article titled, “Why a minimum wage increase divides small business” author Karen Klien stated “When you are faced with 10 employees in a low-profit business you put your money into increasing wages of you best employees and hiring is suppressed." Further, the article goes on to say the fact of retaining the best employees is the focus, thereby reducing part-time employee’s hours to meet the minimum wage requirements (2012). The reduction of hours for part-time further strains the working poor and thus the minimum wage has a limited if any impact on the reduction of poverty. Options The minimum wage

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