The definition of Minimum Wage is “an amount of money that is the least amount of money per hour that workers must be paid according to the law” (Minimum wage). Minimum wage, like other laws, are used to keep the economy in line. Minimum wage laws were invented in Australia and New Zealand with the purpose of guaranteeing a minimum standard of living for unskilled workers. (Linda Gorman) Minimum wage puts a price on the services one offers. Many different principles can be used to explain Minimum wage and explore the different aspects of it. Including what minimum wage does for our economy and the current status of it.
2. History of Minimum Wage
According to Principles of Macroeconomics by Gregory Mankiw, “The U.S. Congress first instituted a minimum wage with the Fair Labor Standards Act of 1938” (Mankiw 4-119). Minimum wage is used to set a limit of pay employers must pay their employees. Through the years the minimum wage has raised as productivity has raised. The minimum wage has constantly fluctuated and changed multiple times.
Congress created minimum wage with the Fair Labor Standards Act of 1938. The first minimum wage was only 25 centers per hour. Through history the minimum wage has increased a little at a time, umping a couple cents each time. The last time the United States changed the minimum wage was in 2007 which was a large jump from $5.15 per hour to $7.25 per hour. This jump of $2.10 was a large increase. Through the years it is evident that the minimum wage is constantly changing. “. It has averaged $6.60 an hour in purchasing power in 2013 dollars. But it has ranged from a low of $3.09 an hour in late 1948 to a high of $8.67 an hour in 1968(Sherk, J. (2013, June 25).
Currently now there is a debate to raise th...
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• What is Minimum Wage: Its History and Effects on the Economy. The Heritage Foundation. Retrieved April 20, 2014, from http://www.heritage.org/research/testimony/2013/06/what-is-minimum-wage-its-history-and-effects-on-the-economy
• U.S. Department of Labor - Wage and Hour Division (WHD) - Minimum Wage. (n.d.). U.S. Department of Labor - Wage and Hour Division (WHD) - Minimum Wage. Retrieved April 20, 2014, from http://www.dol.gov/whd/minwage/chart.htm
• Minimum wage. (n.d.). Retrieved April 24, 2014, from http://www.merriam-webster.com/dictionary/minimum wage
• Linda Gorman. "Minimum Wages." The Concise Encyclopedia of Economics. 2008. Library of Economics and Liberty. Retrieved April 24, 2014 from the World Wide Web: http://www.econlib.org/library/Enc/MinimumWages.html
• Mankiw, N. G. (1998). Principles of economics. Fort Worth, TX: Dryden Press.