The Negative Effects Of The Minimum Wage

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Will the rise in the minimum wage help or hurt the economy? This is a great question to ask from an economic standpoint. Since ‘The Great Depression' the federal minimum wage has been in effect. Lately, fight to raise the minimum wage has been a hot topic. Whether or not to increase it, or if it should exist at all. What will be the burden on small businesses? How is will they balance their needs and the needs of their workers? Also, how will the minimum wage affect a business's profitability? We will examine these issues throughout this paper. Plus, discuss the history of the minimum wage, who collects it, and the effect a raise would have on the economy and the American business.
In 1912, the first place in America to announce a minimum wage was Massachusetts, but before it was set another twenty-five years would pass. June 25, 1938, President Roosevelt signed the minimum wage into law, it was part of The Fair Labor Standards Act of 1938. It started out at $0.25 per hour, which would be equal to $4.18 in today's economy. This rise in income affected about 20% on the labor force. The decree was revolutionary, not many countries had anything like it set in place. In 2012, 74.6 million workers over the age of sixteen were paid an hourly wage, according to the Bureau of Labor Statistics. 3.5 million people that were part of this group were paid minimum wage or lower. Studies from 2012 show that most earners of minimum wage are inclined to be young and a woman.
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