The minimum wage standard is a heavily discussed topic that arises in many political elections as a potential tool used by politicians to leverage the vote of blue-collar American workers. Federal minimum wage conditions are contained in the Fair Labor Standards Act , which according to the Department of Labor was determined in 2009 at $7.25 per hour. As the federal minimum wage does not automatically increase with inflationary and deflationary economic times, any changes to the minimum wage standard would require the passing of a Congressional Bill and the signing of the United States President. Recently, much conversation has risen as to whether the minimum wage standard should be increased to provide more economic stability to Americans and allow for disposable income to be spent back into the economy. According to a January 2015 Reuters article, “consumer spending accounts for more than two-thirds of U.S. Economic activity.” While in theory the increase …show more content…
This is noted by data from the US Department of Commerce that showed in U.S. jobs declining, while overseas jobs increased by 2.4 million during the 2000s. This is a drastic shift that highlights the labor conditions such as the minimum wage are becoming more costly and causing a loss of jobs domestically. Further, Friedman’s focus on the value of labor per skill set shows that in today’s global economy, companies are relocating jobs to areas that allow for the cheapest labor. This is sort of a global equilibrium point for low skilled labor. Duke Professor Campbell Harvey polled 400 CFOs in the United States. From his study, over 70% would “increase contracting, outsourcing, or moving actual production outside the United States” if minimum wage was increased. This global impact highlights Friedman’s concerns with the minimum wage and the loss of jobs directly hurts the American