Pros And Cons Of The Minimum Wage

On Saturday, June 25, 1938, President Franklin D. Roosevelt signed 121 bills. Among these bills was a landmark law in the United States’ social and economic development—Fair Labor Standards Act of 1938 (FLSA) or otherwise known as the Wages and Hours Bill. This new law created a maximum forty-four hour workweek, guaranteed “time-and-a-half” for overtime hours in certain jobs, banned oppressive child labor, and established the nation’s first minimum wage. By definition, a minimum wage is the lowest wage permitted by law or by a special agreement (such as one with a labor union). Throughout the years, the minimum wage has been a central debate topic for the socioeconomic world and now in 2014, the debate has broken through the surface once

Millions of Americans live in poverty unable to find high paying jobs to support themselves and their families. A common belief is that paying a higher minimum wage would help lift people out of poverty by giving those with low paying jobs a higher income, however the evidence suggests otherwise. The 2016 race to the White House heating up, the minimum wage battle is at the forefront of every economic discussion. The rhetoric between candidates within and across party lines is intensifying. Many differing opinions are being heard. As the debate over whether or not to raise the federal minimum wage from $7.25/hour to $15/hour rages on, one side stands apart time and time again.

There are 156. 4 million people in the US workforce, however 5.2% of those are unemployed. The federal minimum wage is $7.25 an hour; however, each state has its own laws regarding minimum wage and the amount can be higher or lower than the federal minimum, but the employee receives the higher of the two (2015). A higher minimum wage means that employers are less apt to hire someone. Some experts explain this by saying that if an employer values the job at a lower wage per hour than the minimum wage set by the government, then the employer is less likely to hire someone to fill that role. The employer only wants to hire someone when that person will be able to generate some sort of value for the company and positively affect the bottom line. Another problem with a high minimum wage is that potential employees are less likely to want to work if they are able to receive unemployment benefits from the government that will almost equal that which they would receive from working a minimum wage job (Gillikin).

Raising minimum wage has been a debate for quite some time. This Essay will go over Pros and Cons. I will research both sides of this ongoing debate. Listing a few from each side. Coming to a conclusion that raising minimum wage is what would be best for the citizens of the United States and for the economy.

The action of raising the federal minimum wage has been cast as a necessary change for the United States, and would result in ensuring that America’s workers are able to receive a reasonable living.Though the controversial issue has turned more complex, with many implications beyond just those who bag groceries, flip burgers, and clean offices. The issue is believed to have various pros and cons, and consequently sparking the ongoing debate on to, or to not change to wage.

A minimum wage is the lowest hourly wage that employers have to compensate the workers for their service. Currently the federal minimum wage is $7.25 per hour. However, many states also have their own minimum wage laws. In those instances, the employee is entitled to the higher of the two minimum wages. In this paper we will discuss the brief history of the minimum wage law and its current legislation. We will also analyze the pros and cons of raising the minimum wage, and the merits of each argument.

The idea of minimum wage is that workers are guaranteed enough money to live off of. The price of minimum wage is determined by the state, but a federal minimum wage is set. Some states choose to go above the minimum wage, while others, such as Alabama and Louisiana, choose to not have minimum wage at all (Root). Minimum wage is important to society, because it can affect many people’s lives. There are many pros and cons to having minimum wage in the United States. Furthermore, various stakeholders are also impacted by this policy in numerous of ways. Minimum wage is a microeconomics and macroeconomic problem that has many consequences. Therefore, minimum wage has been a great economic issue because of people’s support and opposition to the policy.

In 1938, the Federal Government established a minimum wage through the Fair Labor Standards Act, during the Great Depression. Its stated purpose was to keep American workers out of poverty and increase consumer purchasing power to help stimulate the economy. President Franklin Roosevelt, understood that the minimum wage should be a living wage, he stated “by living wages, I mean more than a bare subsistence level — I mean the wages of a decent living.” Today, the Minimum wage is critical for ensuring that hard work is rewarded with fair pay. However, its value has eroded substantially, factors such as inflation and rising prices are decreasing its purchasing power, and the minimum wage is no longer what it used to be, despite decades of economic growth. Today, a family can no longer live on minimum wage; and a single person working full time on minimum wage is barely above the poverty line. When President Obama gave his 2013 State of the Union address, he advocated raising minimum wage from $7.25 an hour to $10.10-yet a year later, this still hasn’t happened. For many working Americans a higher minimum wage will make the difference between living in poverty or not, furthermore it provides a stepping stone into the middle class for many families. If the minimum wage is increased to equal a current living wage, the income inequality gap will decrease and the quality of life for those living on minimum wage salaries will increase,

The minimum wage is defined as the lowest compensation, by law, which an employer may pay his or her employees. In the United States, this monetary value is set by a collection of laws on the federal, state, and local levels. While state and local governments may choose to observe a higher minimum wage than the national minimum wage, the federal government ultimately controls the income of the nation’s lowest-earning employees. At the federal level, the minimum wage was last raised in 2009, from $6.55 to $7.25 per hour. Yet, since 2009, the minimum wage has stayed the same, while the cost of living continues to climb. For this reason, an initiative to raise the minimum wage has numerous supporters, whose key arguments are the reduction of poverty and the increase in efficiency. At the same time, however, opponents of raising the minimum wage claim that it would result in unemployment and would be harmful to businesses. Although their arguments are valid, proponents of raising the minimum wage fail to see the effects of an increase in labor costs on employers. With any cost, one party benefits while another party pays. Furthermore, a raise in minimum wage, and an increase in the cost of labor, will result in losses not only for the employer, but also for the employee. Therefore, for those members of society who fall below the poverty line, raising the current minimum wage will do more harm than good.

The standard minimum wage level has been a controversy over its insufficient wages set for working class Americans. The minimum wage was established to protect unskilled workers from being exploited by employers’ low pay. Introducing the minimum wage provided stabilization in the workplace, but as the cost of living increases, working Americans are demanding a livable wage. In the recent past, the American dream fadedness changed the way Americans view the economy. For many wageworkers, the American dream is becoming less of a possibility as corporations minimize the chances for the poor working class to obtain the dream. However, raising the federal minimum wage will likely result in higher prices for the middle and lower classes because

Millions of Americans live in poverty, unable to find high paying jobs to support themselves and their families. Common belief persists that paying a higher minimum wage would aid in lifting people out of poverty by giving those with low paying jobs a higher income, however the evidence suggests otherwise. As the 2016 race for the White House heats up, the minimum wage battle stands at the forefront of every economic discussion. The rhetoric between candidates within and across party lines intensifies by the day. While the debate over whether or not to raise the federal minimum wage from $7.25/hour to $15/hour rages on, one side continues to stand out from the other.

In the United States, the minimum wage has been a controversial issue and one of the major debates among politics over the years. Leaders in both the House of Representatives and the Senate have discussed some possible advantages to raising the minimum wage along with the possible disadvantages of an increased minimum wage. Members on one side of the debate believe raising the minimum wage could hurt America’s lowest income workers and small businesses, while people on the other side believe the current minimum wage is not a living wage – therefore needs to be raised. In this report, information on both sides of the debate has been considered. As John Stuart Mill (One of the most influential thinkers in the history of liberalism, he contributed widely to social theory, political theory and political economy) once said, “The only way in which a human being can make some approach to knowing the whole of a subject, is by hearing what can be said about it by persons of every variety of opinion, and studying all modes in which it can be looked at by every character of mind. No wise man ever acquired his wisdom in any mode but this” (Mill 12). In this report, we will look at a short description and history of the United States’ minimum wage policies. In addition, we will discuss the status of the minimum wage and present the arguments for and against raising the minimum wage. Research involving minimum wage increases have proved that the minimum wage is an ineffective antipoverty tool. Studies also show that replacing the minimum wage with an expanded Earned Income Tax Credit would be much more effective (Sabia). While, members on both sides of the debate have strong arguments, the United States government should repeal, replace, and redefine minimum wage to reduce poverty among low-income workers and help America’s small businesses succeed.

In New Orleans, “nearly 60 percent of low average workers earn less than what is needed to cover household costs, while roughly half are forced to commute out-of-parish for low-wage jobs. As a result, one in three children live in poverty despite having at least one parent in the workforce,” according to Richard Webster. Furthermore, most people view New Orleans as the center of parties, celebrations, and being bombarded with tourists. While, it is one of the most popular tourist destinations, this city ranks second in income inequality among three hundred of the largest cities in the United States. New Orleans has added more than thousands of jobs in current years, but most of the positions offer wages below the range of a minimum wage worker. Low-income workers like Yet Walker, struggled to make a living in New Orleans. He was working two jobs at two hotels in Central Business District. Still, he couldn’t afford the rent, and sadly he became homeless. At some point, he didn’t have any choice but to sleep in the hotel room break or sometimes he even spent the night at the bus station. Walker is only one out of all the low average workers in New Orleans who suffer from low paying jobs. Since Hurricane Katrina hit the city, many of the job opportunities available to people living in poor communities were in low paying fields, which reduced

The federal minimum wage was set on July 24th, 2009 at a rate of 7.25 per hour. Many attempts have been made to raise the federal minimum wage to 9.25, and then to 10.10, but have all been vetoed by former governors and Republicans. An increase in the current federal minimum wage will force companies based in the United States to turn to outsourcing individual job departments or outsourcing the company as a whole due to undesired financial circumstances. Low-skilled as well as disabled workers are automatically put at even more of a disadvantaged in the work place when their skill sets don’t meet the standard of a higher minimum wage. Unemployment and poverty rates will skyrocket, isolating areas already suffering from high living cost and expenses and forcing them further into depression. In contrary to what many people believe a higher minimum wage would not provide beneficial changes to the economy, instead, the effects of increased minimum pay would cause an unnecessary amount of harm to the country and divide among people.

The only way that minimum wage can be raise is with congressional actions, but sometimes these actions don’t really mean an increase in terms of real dollars. According to alec.org when government sets a higher minimum wage, employers face a higher labor cost that they seem their selves force to decrease other product expenses. As a result jobs available to less experience and less educated are reduce leaving them with less opportunities to find a job. As minimum wages increases business increase their prices too, to compensate their increasement in labor cost.