Minimum Wage: Historical Impact and Economic Implications

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The federal government established minimum wage in 1938. It was established in a law known as the Fair Labor Standards Act (FLSA). This also marked the first time employers could legally pay workers over time. When the law was first passed minimum wage was $0.25 per hour. President Franklin D. Roosevelt said the act was “the most far - reaching, farsighted program for the benefit of workers ever adopted".(Grossman)Raising minimum wage could hurt the economy. Additionally "The Fair Labor Standards Act has been changed two times."(Grossman) "Minimum wage is usually increased every few years, but has fallen far behind inflation." (Grossman)"Minimum wage would have to go from $7.25 to $10.55 per hour to make up value lost to inflation."(Grossman) …show more content…

But Walmart isn't the only business doing this. Restaurants are implementing machines as well. It's practically nationwide and is part of why the economy is the way it is now. Another cost to raising minimum wage is the fact retailers and employers are going to do their best to find a way to make that money back. Meaning they're going to bump up their prices and charge more. Once again something like that would hurt the economy. Imagine soap costing us $10 instead of $3. This would only cause people to be even deeper in poverty. “Yes, it would be nice to raise minimum wage, but at the end of the day you really wouldn't be able to keep it because something else would take it rather if it's higher prices, or taxes, or losing your job all together.”(Hawkins) Raising minimum wage can be a dangerous idea, even if it is to help with poverty. It would cause inflation, and a huge amount of unemployment. Even worse, it could possibly lead to recession. According to Mr. Ron Anthony “Minimum wage has four major areas of economic defect on the labor

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