Some Effects of Minimum Wage

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The federal minimum was originated in the Fair Labor Standards act signed by President Franklin Roosevelt on June 25, 1938. The law established a minimum was of .25 cents per hour for all employees who produced goods that were shipped in the interstate commerce. The wage is equal to $4.04 in today’s market. The Fair Labor Standards Act covered about thirty eight percent of the labor force, mostly in the manufacturing, mining and transportation industries. Congress expanded the coverage and increased the minimum wage rate. The air transport industry was added in 1947, followed by retail trade in 1961. The construction industry, public schools, farms, laundries and nursing homes were added in 1966 and coverage was extended to state and local government employees in 1974. The Fair Labor Standards Act covers about 85 percent of the labor force. Since 1938 the federal minimum wage has been raised twenty two times. From 1949 to 1968 the value of minimum was (2011 in real dollars) rose fast from $3.78 to $10.34. At $7.25 per hour the minimum wage today in real dollars is eighty five percent greater than the original benchmark and just below its average for the past sixty years of $7.59. The Fair Labor Standards Act requires employers to comply with the state minimum wage laws that may set a state minimum wage rate above the federal rate. As of 2011, 45 states and the District of Columbia have their own minimum wages, of which eighteen are higher than the current federal minimum of $7.25 per hour. Only five states do not have their own minimum wage laws and they depend on the Fair Labor Standards Act. Currently the highest paying minimum wage state is Washington at ($9.04), followed by Oregon ($8.80) and Vermont ($8.46). States with relatively high state minimum wages may have lower job growth and lower economic growth that would otherwise be the case. States with lower wage levels, such as those in the Southern region, have greater than average share of...
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