The Federal Minimum Wage Increase

The first federal minimum wage mandated by the government was in 1938. When the first minimum wage became law in 1938, it was set at just 25 cents. Today, the federal minimum wage mandated by the government is set at $7.25 an hour. “Many states have their own set minimum wages, which are currently above $7.25 per hour already. Currently, 29 states and the District of Columbia (D.C.) have minimum wages above the federal minimum wage of $7.25 per hour. D.C. 's new wage of $10.50 an hour makes it the first jurisdiction to cross the $10 threshold among the states,” (Halvorson). The last time that the federal minimum wage mandated by the government was changed was over 8 years ago. “The last time Congress voted to raise the minimum wage to its current rate of $7.25 an hour was on May 24, 2007. Since then, the cost of life 's essentials has shot up. Groceries cost 20% more, a gallon of gas costs 25% more, and average tuition at a community college increased 44%. But the minimum wage remains at

Concerning the wage rate, the United States government has intervened to maintain a lower limit on the hourly wage rate of a worker’s labor by implementing a price floor known as the minimum wage rate. This legal floor on the market price of labor sets a minimum hourly pay rate for workers in the United States. Effective July 24, 2009 the federal minimum wage rate is $7.25; in states that also have minimum wage laws the employee may be subject to both federal and state minimum wage laws, in which case they are entitled to the higher minimum wage rate (U.S. Department of Labor Wage and Hour Division, 2011). Since the Fair Labor Standards Act (FLSA) was created in 1938 the federal minimum wage rate has gradually increased from $0.25 in 1938 to $7.25 present (U.S. Department of Labor Wage and Hour Division, 2011). Although continuing to increase the minimum wage rate may include potential positive factors, it would hinder the U.S. economy overall.

Next, another problem the rise of minimum wage poses is the rise of inflation. If employers are required to pay their employees more, then they need to do something to compensate for the extra money they are losing. With this in mind, employers would have to increase the prices of goods. But sometimes raising prices is not an option for employers. “If a business cannot simply pass along its new labor costs, it must somehow absorb them—by eliminating workers rendered unproductive by the new minimum wage, by replacing labor with more-productive machines, or by cutting production” (Intorduction 2). This brings back the issue of minimum wage causing a dramatic increase in unemployment. Sherk believes it is the wrong time to increase minimum wage, due to the fact that America is currently in a recession. The right time to think about raising minimum wage would be when the unemployment rate drops drastically. Sherk states “In 2007, Congress voted to increase the minimum wage, raising it in three $0.70 increments from $5.15 to $7.25 an hour. The final installment represents a 10 percent increase in the cost of hiring minimum wage employees” (Sherk 1). Seemly inflation and minimum wage increases influence each other.

U.S. Congress passed the federal minimum wage law in 1938 as part of their Fair Labor Standards Act. Federal minimum wages were intended to ensure fair wages were paid to an alarming amount of women and youths employed and paid substandard wages. This also seems to be the case today, where countless Americans who work full time, cannot make ends meet by making minimum wage. Evidence shows that raising the minimum wage would drive consumer spending, thus producing faster macroeconomic growth. Wage stagnation is one of the key things holding back our economy from growing the way we need it to.

Raising the federal minimum wage to $15 an hour can have detrimental effects on society. Some issues that may arise are increases in unemployment and small businesses not being able to handle the financial burden, which will lead into job benefit cuts. Furthermore, a rise in minimum wage will cause inflation and businesses to raise the prices of their goods and services. People purchasing power will continue to stay the same; the struggle to close the gap between products and services will not

According to an article, written by Rick McGahey, there is study conducted by the National Employment Law Project (NELP) that found “no correlation” between minimum wage increases and employment levels.  Moreover, this finding is apparently consistent with a 2013 Center for Economic and Policy Research summary report which found that almost all recent empirical economic research on minimum wage increases “points to little or no employment response to modest increases in the minimum wage.”   Now if there is correlation between minimum wage and job losses, what exactly makes people oppose raising minimum wage because ever since 1938, the federal minimum wage has been increased 22 times.  For more than 75 years, the real Gross Domestic Product (GDP) per capita has steadily increased, even when the minimum wage has been raised; so what kind of issue do those that are against it have now, once this has been put out into the

In 1912, Massachusetts became the first state to pass a minimum wage requirement, mandating the starting hourly salary that could be paid to workers. The first federal minimum wage law was introduced in 1938 by President Franklin Delano Roosevelt as part of the Fair Labor Standards Act. At that time, the minimum wage was set at 25 cents an hour. Since that time, the federal minimum wage has been raised 22 times by 12 different presidents and is currently 7 dollars and 25 cents per hour. While several states apply the federal guidelines, many other states require a higher minimum wage for their employees – the highest being the District of Columbia at 11 dollars an hour. Across America, there has been a growing sentiment to raise the federal minimum wage. Democratic Presidential candidate Bernie Sanders has stated that, if elected, he would support a bill that would raise the federal minimum wage to 15 dollars an hour.

Throughout the years, numerous people have struggled financially due to the low paying minimum wage. In 1938, a Federal minimum wage was introduced by President Franklin Delano Roosevelt, due to the Great Depression. The first minimum wage, which was originally coined as $0.25, has been increased by congress 22 times, most recently in 2009, where the minimum wage was increased by seventy cents. However, the current wage is valued at a lower price than what the original minimum wage would be valued as today. Therefore, it has lacked the ability to keep up with rising prices. The Federal Minimum Wage should be raised in order to stimulate the economy, and keep up with inflation.

Raising the federal minimum wage doesn’t cause substantial unemployment as most economists agree, including over 600 economists who wrote a letter to Congress urging a wage increase, and the Economic Policy Institute.

How would a minimum wage increase effect employment and family income, businesses, and the economy are just a few of the main arguments. Typically any increase in wage also increases income right? Raising the wage in the perception of small business is not usually a good move for the economy. Poverty is an important factor when it comes the economy and minimum wage could be the solution to that.

The minimum wage wasn’t always as real as it is now it had steps to climb before it became to be. In 1912 a standard minimum wage was proposed but was seen as unconstitutional and so it was never passed. However, the reason behind the law not passing was because congress believed payment should be

In 1938, the first national minimum wage laws in the United States were passed as part of the Fair Labor Standards Act, which served as “a floor below wages,” to reduce poverty and to ensure that economic growth is shared across the workforce. Today, many people who work for companies that pay at or near the minimum wage and remain near or below the poverty level rely on government health and food security and income programs to supplement their living expenses. Since 1938, there have been many additional policies to the Fair Labor Standards Act that have changed many things, such as increasing the national minimum wage numerous times to the currently salary level, which was set in 1997. The Fair Minimum Wage Act of 2007, from the United States Department of Labor Wage and Hour Division, was a policy to change the federal minimum wage from $5.15 to $7.25 in three additions, which began in July of 2009. (U.S., 2009).

The United States has maintained a minimum wage which was enacted since 1938. At the present time there is much political debate in regarding to increase the minimum wage to levels at the federal level, state, and local levels of government across this country. There are various theories regarding the minimum wage. Some believe it would circulate money into the economy faster which would negate and negative effects on employment, or even improve unemployment rates. Others point to the economic theory of supply and demand, and claim it will increase the unemployment rate. Both of these are simply theories and must be shown to have real life implications. Are moderate increases in the minimum wage above the equilibrium market rate an

So, there has been many discussions on whether or not raising the minimum wage can cause the loss of jobs in the United States. However, there are many different types of discussion about the different issues relating to minimum wage. So overall, it is said that it is appropriate to pay more attention to future job losses cost which is from having higher minimum wage. Of course, this would be against the benefits of minimum wage increases for other workers who expect an increase. It is said that raising the minimum wage definitely raise incomes for workers that are paid low without putting a reduction on the overall employment or job growth significantly.

Early studies of the effects of minimum wage increases were rather simplistic, focusing solely on the U.S. national minimum wage. These studies found that among young adults aged 16-24, the elasticity for labor was between -0.1 and -0.2, which means that a 10-20% increase would decrease employment among young adults by 1%. This would mean that if the minimum wage was increased in 20% increments from $7.25, what it is currently, to $15, what some candidates plan to change it to, young adult employment would drop by approximately 4%. Another study done by Neumark and Wascher (2007) found that two-thirds of minimum wage studies and 85% of persuasive studies found consistent evidence of job losses among low skilled workers