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The Pros And Cons Of Minimum Wage Laws

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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 …show more content…

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.

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A recent study involving three hundred fifty thousand small businesses and the IRS proved that by raising the minimum wage, proved that by raising the minimum wage in cities, actually created jobs (Meyerson A.19). The survey showed that the cities with a higher minimum wage had more jobs come to the area, aiding in job growth (Meyerson A.19). Another argument that leans toward the raising of the minimum wage involves people in poverty. Studies have shown that by raising the minimum wage, more people can live above the poverty line (Meyerson A.19). By raising the minimum over nine hundred thousand people would be

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First, one main reason that the minimum wage should be raised is because the economy will prosper. “Economic Policy Institute stated that a minimum wage increase from the current rate of $7.25 an hour to $10.10 would inject $22.1 billion net into the economy and create about 85,000 new jobs over a three-year phase-in period” (ProCon). This quote shows that the economy will flourish from the increase of the minimum wage and that unemployment will decrease. Another quote that shows how raising the minimum wage will affect employment is “To the extent that through these contour effects it affords as much as 70 percent of the workforce greater purchasing power, it effectively increases aggregate demand for goods and services, which should ultimately lead to the creation of more jobs” (Challenger 19). Bryan Covert supports raising the minimum wage by

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The minimum wage was initially set at $0.25 an hour and has only risen since then. (Fair Labor Standards Act or FLSA) Minimum wage has been a hot political issue since its institution and it has often caused rifts in the political system. Currently,

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Many people are afraid that by raising the minimum wage it will hurt the poor, reduce other job benefits, and reduce competition. A 1997 National Bureau of Economic Research study estimated that the federal minimum-wage hike of 1996 and 1997 actually increased the number of poor families by 4.5 percent (Henderson). Employers respond to forced higher wages by adjusting other components of employee compensation, such as health insurance or other benefits. Although few minimum wage workers have employer-provided health insurance, employers have found other ways to adjust, such as cutting on-the-job training (Henderson). Gov. Schwarzenegger’s proposed a 15 percent increase in the state minimum wage would destroy about 35,000 to 70,000 unskilled jobs-putting 1.5 to 3 percent of young Californians out of work.

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Correspondingly, there are several economic perspectives that delve into the pros and cons of the public policy of minimum wage. The implementation of an increase in minimum wage is a commonly supported argument. Increases are said to put more money into the pockets of low-income workers, which, as a result, will stimulate and expand the overall economy (Mejeur). In

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Considering its role in setting remuneration standards, the minimum wage affects other factors of employment such as the availability of jobs and the citizens' purchasing ability. Therefore, it causes a decrease in employment to some extent and enhances the household, individual, and family income. The primary role of the federal minimum wage is to ensure that workers are not underpaid and that they are not exploited by their employees (Manzo, & Bruno, 2014). Actually, the determination of the

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In the 1800s, America went through the Industrial Revolution. A push for laws to protect workers erupted due to dangerous working conditions. Soon after in the 1890s, Australia and New Zealand became the first countries to mount national minimum wage laws. The United States set forth its minimum wage laws in 1938 (Grossman). These laws were passed by President Roosevelt in the Fair Labor Standards Act, which set a minimum wage of twenty five cents per hour and established a 44 hour workweek (Is federal minimum).

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Whether the United States federal minimum wage should be increased, is often debated. The federal minimum wage has been changed twenty-two times since its inception. In 1938, the minimum wage was set at 25 cents per hour. Our economy has drastically changed since the early 1900s, the 25 cents per hour minimum wage has been changed to $7.25 an hour. Even with this change, due to the current inflationary situation, living standards are nearly impossible.

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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.

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History of the minimum wage in the USA The first attempt to establish a federal minimum wage was in 1933 as part of the National Industrial Recovery Act but it wasn’t the first in the US history asMassachusetts passed minimum wage laws in 1912 covering only women and children. The 1933 Act introduced a $0.25 per hour standard was set,but it was ruled unconstitutional by the U.S. Supreme Court because of restricting the employers ' rights to set the price for their labor.

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The United States has had a national minimum wage for workers since 1938. President Roosevelt established the price floor for labor after various states adopted differing laws for workers. He believed the government needed to regulate the workforce to improve working conditions, like preventing child labor and taking advantage of passive workers. Doing this, he thought, would optimize the country’s resources. Over the years, Congress has raised the minimum wage many times to account for inflation and the increase in productivity.

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Introduction Minimum wage is the lowest hourly rate an employer can pay an employee for hours worked. The topic of raising the minimum wage is a sensitive issue for many people. The livelihood of many relevant stakeholders will be directly effected by policies created in regards to raising minimum wage, both positively and negatively. This paper will examine the history and current state of minimum wage. It will identify the issues connected to raising minimum wage, analyze the arguments for and against, and make recommendations based on the analysis.

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History of Minimum Wage In over about 120 years ago, New Zealand was the first country to have a national law creating a government role for setting a minimum wage. The minimum wage has been a cornerstone of the United States’ labor system, and has been a cutting-edge labor law topic among employers and workers for decades. However, the United States has not always had a minimum wage, and was introduced during the Great Depression of the 1930s. Before the minimum wage was introduced there was no federal minimum wage and no legislation to protect workers from exploitation. Therefore, the lack of regulation cause thousands of people to have a routine exploit in poor working conditions in factories for little pay.

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Minimum wage was first established in 1938 by Franklin Delano Roosevelt, in an attempt to stimulate economic growth and create a better standard of living for the lower class. This attempt was fairly successful, but also has many consequences. You may be asking yourself, “how on Earth could setting a limit on how little you can pay someone be bad?” On the surface this statement seems logical, but if we delve deeper we begin to see many negative effects on the implementation of minimum wage. In our nation the minimum wage law almost seems out of place, like it doesn’t quite fit in.

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In the past three years, many politicians and labor unions have been pushing for an increase in minimum wage. Minimum wage is the lowest set wage by a law of a government body. An increase in minimum will benefit some people, and hurt others. An increase in minimum wage will cause benefit in the short run but will be very damaging to the economy in the long run. There should not be an increase in minimum wage because it is unhealthy to the economy in the long run and it will be the major cause of job loss, increase in inflation, competition, and the price level of goods and services.

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