2 April 2014
Minimum Wage in the United States The minimum wage in the United States was established in 1938 under the Fair Labor Standards Act, and has been amended numerous times since the original wage of $0.25 per hour; the current federal minimum wage is $7.25 per hour. The act makes it illegal to any employer to pay an employee under a federally mandated minimum wage, as well as regulates child labor and overtime hours and wages (DOL). In the past few years the debate on whether the minimum wage should be raised or not has become increasingly important to the United States’ economic status and its minimum wage workers. It has become increasingly difficult for college graduates …show more content…
Their argument is understandable when the previous raise in the minimum wage from 2006-09 is looked at. The unemployment rate skyrocketed, and the American economy went into recession during this time frame, but there were many other factors involved. According to Nancy Love, “The recession was triggered by increasing defaults and foreclosures in the subprime mortgage markets that eventually spread to other mortgage markets, corporate bonds, and commercial real estate. The stock market plummeted, wiping out over eight trillion dollars in wealth” (1). The spike in the unemployment rate and economic recession cannot be blamed only on the minimum wage increase. The housing market is coming back, along with the stock markets, and consumption is even starting to rise again. Conservatives also argue that if the minimum wage is increased, then employers will be forced to either “choose between paying the unskilled worker less, firing the worker, or going bankrupt. Under minimum wage legislation, the first option may not be available because it is illegal, so it leaves only the latter two. The most likely conclusion in this case is unemployment for the unproductive worker” (Hovenga 466). If a worker is earning more than his productivity, then the employer will be …show more content…
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