Minimum Wage and Its Implications

763 WordsFeb 2, 20183 Pages
Minimum wage affects everyone. The current minimum wage is at $7.25 and President Obama announced that he wished to see a change in the minimum wage, he wants to raise the hourly wage to $10.10. A rise in the income of those who are employed will also raise the cost of hiring unskilled labor and can potentially reduce the number of people hired by businesses. Also, if minimum wage is raised then the price of the products that the companies are making might increase which will continue the cycle of minimum wage not being enough to survive on. The increase of minimum wage will result in negative effects that will have a significant impact on national economy. The federal minimum wage originated in the Fair Labor Standards Act (FLSA) signed by President Franklin Roosevelt on June 25, 1938. The FLSA originally only covered about 38 percent of the labor force, mostly in the transportation, manufacturing, and mining industries. As the years went on the FLSA began covering more and more people. Over the years, Congress significantly expanded the coverage and increased the wage rate. Over the course of 76 years the federal minimum wage has raised 22 times (Wilson). The first minimum wage stood at 25 cents an hour (Sherk). The last minimum wage increase occurred in 2007, when Congress raised the wage slowly from $5.15 an hour to $7.25 an hour in July 2009 (Sherk). Congress typically raises the minimum wage during times of healthy economic growth and low unemployment. Who earns the
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