Federal Minimum Wage Essay

The federal minimum wage in the United States has remained unchanged for years, while failing to keep up with inflation and the rising cost of living. The Fair Minimum Wage Act of 2007 established the federal minimum wage, which gradually increased from $5.15 in 2005 to $7.25 in 2009. As of today, the wage remains the same. Many U.S. states have taken matters into their own hands and have raised their state’s minimum wage. So far, 30 states, including Washington, D.C., have minimum wages well above $7.25. The other 20 states use the federal wage as a guideline. However, out of those 20 states, Mississippi, Louisiana, South Carolina, Alabama, and Tennessee, remain without a state minimum. In Wyoming and Georgia, workers' wages fall below the

Addressing the issue of the minimum wage is straightforward. To pay higher wages, the money comes out of the hands of business owners. A wage increase has the potential to alleviate financial strain for low-income workers and has implications for revenue distribution for businesses. Higher labor expenses may result in lower business income for employers, reducing revenue from individual and corporate income taxes. Labor expenses, which consist of wages earned by workers, are subject to higher taxes than capital income, which includes dividends, interest, and revenue from businesses (2). Businesses may need to set aside additional funds from their resources to increase wages. This shift in resources from business owners to employees can have a substantial impact on the livelihood of a business, especially a small one. Conversations and actions have been presented every year to increase wages incrementally. For instance, the Raise the Wage Act of 2023 was introduced in July of 2023 to slowly increase the federal minimum wage to $17 by 2029. According to the CBO, the act would lead to a net reduction in revenues from 2024 to

The lack of change for 15 years for the federal minimum wage is a major issue in today's economy. Despite the fact that some states have taken measures to raise the minimum wage. However, several states remain with the same minimum wage and millions of hardworking Americans are still unable to handle the rising cost of living. The unwillingness to raise the minimum wage to reflect inflation and growing living costs has resulted in significant economic inequality, putting many low-income workers at a disadvantage. The minimum wage should not be raised based solely on hourly reductions; it is to ensure that every worker receives a livable wage. As previously stated, the Congressional Budget Office (CBO) stated that raising the federal minimum wage to $15 per hour may have a favorable impact on total family earnings and benefits. This may help millions of workers escape poverty and achieve financial security. Millions of Americans are struggling to manage their current finances, with many having to pick between paying for basic needs and other necessary bills. Living costs are still rising, as have the costs of housing and education in recent years. CBO's study on raising the minimum wage demonstrates that the advantages of raising the minimum wage outweigh the negatives. These negatives revolve around lowering business revenue due to them having to properly