Minimum Wage : A Part Of Federal Law

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The minimum wage became a part of federal law with the passage of the Fair Standards Act in 1938. This new law stated that any employer could not legally pay an employee below a federally mandated rate. “The argument for the minimum wage comes down to this: since no family can survive on an income lower than the minimum wage, it is the job of government to mandate a minimum wage to keep people out of poverty.” (Vance, 100) In recent years, the discussion has turned to the view that the minimum wage has been overwhelmed by inflation and is no longer adequate in providing for the basic needs of a family and that it should be raised. This increase would affect the paychecks of around “20 – 30 percent of the labor force” (Belman and Wolfson, 4), but this would not be the end of its consequences. The raise would, also, be felt in the areas of poverty, employment, and inflation, but the final result will not be the one wanted or expected. Poverty is defined as “the state of one who lacks a usual or socially acceptable amount of money or material possessions. Poverty may cover a range from extreme want of necessities to an absence of material comforts.” (309). The main goal of the minimum wage law is to allow people to rise out of poverty and for them to be able to afford a decent lifestyle within their community. It is considered common sense that if the working poor were to have a raise in their paycheck, then the poverty rate would decrease. Unfortunately, this statement has been proven to be false. One research has found that “poverty and the minimum wage do not interact or affect each other in any way.” (310) and the reason for this is a very simple one, but is not one often considered by the government. Studies have shown that “o... ... middle of paper ... ...ss of the California Highway Patrol.” (Rehnquist, 125) The most alarming effect of a minimum wage increase can be seen when it directly affects everyone’s life because of limited time spent training for public service positions, such as EMT personnel, Highway Patrol, or Police Officers. Another adverse effect of an increase in the minimum wage is an increase in inflation, which is an increase in the price of goods or services. Kevin M. Murphy, a professor of Business Economics and Industrial Relations at the University of Chicago, investigated the employment effects of the 1990 and 1991 minimum wage increases and discovered that “raising the minimum wage does not make anybody better off without someone else paying for it.” (Kosters, 8) That “someone else” becomes the consumer since the company will raise prices in order to offset the increase in their worker’s pay.
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