April 27, 2011
Minimum Wage effects: Beneficial or Hindrance?
In the United States, workers are covered by the Federal Government when it comes to the worth of one’s labor. This is done through laws governing the minimal amount of pay per hour of labor. This law is called the Fair Labor Standard Act (FSLA). Currently, the minimum wage is set at $7.25. This is much higher than previous amounts. During economically difficult times, the Federal Government may deem it necessary to raise the minimum wage. This decision has many effects upon the nation financially. In 2007, the Federal Government proposed and enforced a series of increases with the results being $7.25 as of July 24, 2009 (Women’s Health Weekly). This increase has a direct effect on workers and employers. For those employees earning less then the new minimum wage, the gain in income was very welcome. This additional income will allow individuals to begin to pay off debt or more easily afford groceries and other necessities. For the workers of minimum wage jobs who managed to live within their means and avoid debt, this increase could potentially provide a better standard of living. Perhaps, the increase of the paychecks will be enough to afford purchasing a better car or even a better residence. Some individuals who are fiscally responsible may even decide to save the difference or invest it in stock options or IRA’s to help build a better foundation to a higher standard of living. With this positive effect on workers come the adverse effects to the employers. For large scale companies such as corporations, the requirement to pay employees more does not have a large impact on a company’s ability to operate as well as it has been. For small scale companies like family owned business, this new expense on payroll is a big deal. It could potentially influences the company to cut employees hours or even reduce the number of employees. In any case, large or...
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