Minimum wage law identifies the minimum hourly, daily or monthly wage for the workers and prohibits the employers from hiring the workers below the set limit. The federal minimum wage has remained $7.25 since the year 2009 but the employees in most of the states are covered by the higher minimums. In the past, the minimum wages were given a lot of consideration. Initially, the laws were only applicable to children and women. It was after Great Depression that the laws were applied to the complete workforce in many countries. However, the laws were still applicable to certain industries. In the United States, the minimum wage laws were first set up in the year 1938. (Cooper and Doughlas)
The minimum wage law comes under the Fair Labor Standard Act. Twenty-nine states, several counties, and cities have set up their own minimum wage. The minimum wage was set at $7.25 and the Republicans strongly opposed the increase in the minimum wage. They suggested that the increase will reduce the number of jobs as the minimum wage jobs will
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The orthodox approach that considers the increase in minimum wage will reduce the employment is not supported by any strong proof. A research study conducted by Card and Kreuger in California and New Jersey highlighted that in the year 1988 and 1992 when the minimum wages were increased no unemployment affect was witnessed by the economists. Economists have suggested that the increase in minimum wage makes the life of the people better and it does not cause unemployment. Research identifies that the market dynamics cannot be well explained using the supply and demand rules. There are businesses that enjoy a lot of power and they often pay the workers less than their worth. The increase in minimum wage helps the employees to secure a good wage without affecting employment.