The Fair Labor Standards Act Essay

The Fair Labor Standards Act Essay

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The Fair Labor Standards Act (FLSA) which was enacted in 1938, is a federal legislation that establishes the minimum hourly wage for all covered workers in the United States (Bradley, 2015). Currently, it applies to two-thirds or American workers in both the private and public sectors (CBO, 2014). Workers whose compensation relies heavily on tips are exempted from this Act but are subjected to special arrangements. For such workers, the regular minimum wage applies to their compensation including their tips and a lower cash minimum wage that applies to their compensation excluding their tips (CBO, 2014). Since the passing of the law in 1938, the minimum wage rate has been raised about 22 separate times. The provisions of the minimum hourly wage in the Act have also been amended on numerous occasions. The most recent change to the minimum wage rate was to the current increase of $ 7.25 per hour (Bradley, 2015). Recently, there has been calls to increase the minimum wage to $ 15 per hour. Proponents of increasing the minimum wage argue that increasing the federal minimum wage for low income worker will increase the aggregate demand by providing greater purchasing power to workers who receive a pay increase and that it will help reduce turnover which has been a major problem for most firms. Opponents argue that increasing the federal minimum wage will reduce employment or result in reduced hours, reduce the profits of firms paying the increased minimum wage, and result in a general price increase of goods and services. In this paper, the author will argue supporting an increase of federal minimum wage.
Increasing the minimum wage is necessary for workers have a decent living. Increasing the minimum wage in necessary to enable people...


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...um wage is necessary to enable workers to have a decent living. All economists agree that increasing the minimum wage is inevitable and is also a necessary trade off. While there claims that increasing the minimum wage can lead to significant job losses. Numerous studies have shown that in many situations there are often no losses, or the losses are often minimal. Studies also show any negative impact in the economy diminishes quickly over time. Furthermore, increasing the minimum wage create more opportunities for hardworking Americans to improve their lives. Workers will also have the power to purchase more products and services which will lead to increased profitability of firms and create more opportunities of employment. Increasing the minimum wage will also supercharge the ailing American economy and help it recover quicker from the recent financial crisis.




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