Federal Minimum Wage

The discussion about a federal minimum wage was around since the concept of it emerged. The meaning of concept of a federal minimum wage is in its name. It is the lowest daily or monthly remuneration that employers may legally pay to workers. According to United States Department of Labor the first attempt to set a federal minimum wage was in 1933 and it equaled to twenty five cents per hour ($4.23 in 2015). However, in 1935 United States Supreme Court abolished the federal minimum wage. The federal minimum wage was reestablished in 1938 due to the Fair Labor Standards Act. It remained unchanged for seventeen years and in 1955 increased to one dollar per hour. After that the federal minimum wage gradually changed and became two dollars thirty

From the first glance, the rise of the federal minimum wage is beneficial to everyone. It will improve living standards and the country’s overall economy, create more job opportunities, and reduce the poverty rate. However, after analyzing some economic theories and reading presumption made by qualified economists the idea of increasing the federal minimum wage will not look as good as before. Oppositely to benefits the raise may adversely affect standard of living, cause layoffs and fewer hirings, or has negative effect on poverty rate. Both points of view show the significant impact that the raise of the federal minimum wage may cause and both of them are partly correct. However, for the county’s economy it is more efficient to put the emphasis on the worst case scenario to prevent any possible economic problem such as crash of a stock market or financial

The expansion will occur due to the change in the workers income caused by the federal minimum wage rise. When the income will grow the amount of spendings will grow as well. As the result, businesses’ profits will go up which will give them an opportunity to provide more workplaces.Thus people who seek jobs will be given a chance to find one. However, it would perfectly work this way only for a big businesses with higher profits level while small businesses will not feel the benefits that much. However, big businesses may collaborate with small businesses since they are able to produce and earn more than they did before. In this case both big and small businesses will be satisfied. From this perspective, raise of the federal minimum wage provides more job opportunities and reduce