Minimum wage affects all classes and has a large effect on the state of the economy. For these reasons, I propose that minimum wage should be increased to a rate that will adequately provide working families with the funds necessary to survive. Minimum wage was first enacted in 1938 to ensure that workers were maintaining a livable wage. This was mandated under the Fair Labor Standards Act (FLSA) of 1938, which also made sure that workers were free from exploitation and unsatisfactory workplace conditions. At the time of this legislation, minimum wage was set at $0.25 per hour; this equates to approximately $4 in 2013.
With President Franklin Roosevelt’s cries for “A fair day’s pay for a fair day’s work,” the Fair Labor Standards Act established minimum wage in 1938 (Grossman). Overtime, the minimum wage has been raised in order to account for inflation (BLS 14). However, what the overall economic impact of raising the wage will be is once again a daunting and extensive question. The controversy over raising the minimum wage seems to come from often conflicting economic opinions. While raising the minimum wage is done with good intentions, critics argue that a higher minimum wage will harm those it is actually trying to help.
A minimum wage was first established in 1938 to increase the standard of living of lower class workers. To discuss what is better for the country and its citizens, people have to understand what is a minimum wage and what are its effects. In the 2013 State of the Union, President Obama proposed raising the minimum wage from the current $7.25 to $9.00 by 2015. This has caused arguments between the rich, small businesses, minimum wage workers, and the unemployed because it affects each of them differently. Obama’s plan is to bind the minimum wage to the cost of living, which ensures that minimum wage goes up with inflation.
The Truth about Minimum Wage A federal minimum wage has been around since 1938; starting out as a way to set wage precedents for workers, minimum wage has grown and changed in accordance with growing inflation for the past 76 years. Although a federal minimum wage allows workers to have a minimum amount of income that is necessary to survive and pay the bills, and it forces businesses to share some of the vast wealth with the people who help produce it, federal minimum wage costs the economy thousands of jobs and makes little sense due to cost-of-living differences throughout the country. People tend to believe a federal mandated minimum wage helps the poor, and counteracts poverty. Darius Ross, of the Rockland County Times, believes that “raising the minimum wage will put more money in the pockets of workers who most need to spend those dollars. It will boost consumer spending at local businesses across the state.
President Obama has approved a plan to increase the Federal minimum wage to $10.10 an hour by 2016. There are those that believe raising the minimum wage will benefit low wage earners and boost their families over the federal poverty line. However, others believe that it will negatively affect the same group of people it is proposed to help. Many believe unemployment will increase due to less job opportunities and employees being let go, and businesses will be put in danger. Small businesses will be in more danger than large business will be.
At this rate, a full time employee would earn an annual salary of $15,080, meaning that a family of two people, for example a single working mother with one child, working a full time minimum wage job, would sit below the federal poverty line of $15,730 for two people (2014 Poverty Guidelines). While it is true that there are tax breaks such as those for children, and the Earned Income Tax that exist to help such people living in poverty, the fact exists that the wages in the US have not kept up with inflation and the cost of living. While the value of the federal minimum wage has risen 21% since 1990, the cost of living itself has risen 67% (Gilson). Opponents are quick to argue that only unskilled workers are paid minimum wag... ... middle of paper ... ...4. Lowery, Wesley.
A full time minimum wage worker earns about $15,000 and some change a year which is far from being enough for a family with more than one person. More women are earning minimum wage at an hourly rate than men. The good thing with minimum wage is that there are not any taxes being taken from paychecks; however, people are still struggling trying to make ends meet from not earning enough money to support themselves and their family. Individual earning even $1 above the minimum wage pays tax which is used to aid those who are earning minimum but in my opinion the companies paying minimum wage should be responsible for that instead of tax payers picking up the tab for them. For instance, according to a report prepared by the Democratic staff of the U.S. house Committee on Education and the Workforce, Wal-Mart, the nation’s largest employer, employ... ... middle of paper ... ...r. 2014. .
Poverty in America: The Concept of Living Wage vs. Minimum Wage The value of wage and just compensation has grossly affected the quality of life among American workers. The concept of a living wage is founded on the belief that working people have an inherent right to a decent means of support and that wage labor is not only a permanent part of the social order, it is a necessary element of corporate America and small businesses alike. In light of the struggles associated with minimum wages, there has been a growing need to address living wages as it is an on-going battle for many Americans to live above the federal poverty line and meet the basic cost of living. When considering the minimum wage level which is set by law, it is only fair that it should function as the platform for meeting the very basic standard of living.
According to 2014 U.S. guidelines, a family of three meets the standards to be in poverty if their annual income is less than $19,790 while a full time FMW worker makes $15,080 annual... ... middle of paper ... ...cs/poverty_measure-how.html (accessed April 30, 2014). Neumark, David, and William Wascher. "Do Minimum Wages Fight Poverty?." Economic Inquiry 40, no. 3 (2002): 315-333.