...Overview of the Federal Minimum Wage The Fair Labor Standards Act (FLSA), a law that guarantees employees and youth a fair minimum wage and overtime pay. It is regulated by the Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL); it mandates employers to pay all nonexempt employees a federal minimum wage no less than the determine amount set by the government (U.S. DOL, 2011). Unfortunately, the federal minimum wage still sits at $7.25 per hour and has remained the same since George W. Bush signed a law to change it on July 24, 2009 (Risher, 2013; U.S. DOL, 2011). So, why did so many government officials decline the increase of the federal minimum wage and why do they fear the positive impact that the increase will have on America? This paper intends to briefly discuss six laws, all pertaining to federal minimum wage introduced to the House of Representatives within a year and highlight one member of the senate who disapproved the law for passing. In addition, this paper will briefly point out statements made about why some Senators chose to decline the bill; and finally, this paper intends to briefly explain any legal issues preventing the wage increase and implications for management. Start of Hope: Minimum Wage Fairness United States senators and representatives have introduced numerous federal minimum wage bills to the House of Representatives in order to amend the Fair Labor Standards Act (FLSA) during their term. These bills were designed to either...
Words: 3510 - Pages: 15
...ENG 111 10 March 2014 The Reasons Why Federal Minimum Wage Is Raised U.S. President Barack Obama signed an executive order on February 12, 2014 to raise the minimum wage for federal contract workers to $10.10 an hour starting next year and encouraged employers nationwide to increase wages for their workers. The president also announced during his State of the Union address last month that he intended to take executive action to raise wages for federal contract workers (Mason). Order to understand this issue, we are going to understand what the Federal Minimum Wage is and when started it in the U.S.A. According to the United States Department of Labor (USDL), early in the administration of the Fair Labor Standard Act (FLSA), it started to be apparent that the use of the legal minimum wage was prone to producing undesirable efforts upon the financial systems of Puerto Rico and also the Virgin Island if put on all their covered industries. As a result, on June 26, 1940, an amendment was passed prescribing the establishment of special industry committees to find out, and problem through wage orders, the minimum, wage levels relevant in Puerto Rico and also the Virgin islands. The rates established by industry committees might be under the legal rates relevant elsewhere within the United States. In 1949, the minimum wage was elevated from 40 cents an hour or so to 75 cent an hour so for those employees and minimum wage coverage was extended to incorporate employees in mid-air...
Words: 1800 - Pages: 8
...Minimum wage has changed many times throughout the years. There are many people who are affected by the changes that are made. Many believe that raising the minimum wage is a good idea and have pushed for the increase. Minimum wage has many effects on the economy: helping families with the cost of inflation, helping businesses thrive, and can also cause job loss. When minimum wage is raised it creates more money for workers. The boost in pay for families helps them to buy necessities, such as food, clothing, housing, and transportation. When products become more expensive, it is hard for families who only make minimum wage to purchase these items. Government will then tend to step in by increasing the minimum wage to an amount that can help with these expenses. “In his State of the Union address, Obama pressed to raise the hourly rate in stages to $9 an hour in 2015, up from the current $7.25, and index it to inflation. The change, should it become law, would boost the wages of 15 million Americans, according to the White House (Luhby, 2013).” When minimum wage is raised it will help “lift 900,000 families out of poverty and increase the incomes of 16.5 million low-wage workers in an average week (Lowrey, 2014).” Increasing the price of minimum wage can help businesses to thrive. When more people are being paid an increased amount than before, it would cause them to increase spending after receiving their paycheck. With receiving more money, families will tend...
Words: 1001 - Pages: 5
...FREE MARKET ECONOMY According to Pmiranda2857 (2009), the free market economy is an economy which promotes competitions between businesses. Basically, without this market system, consumers would not have a say in price determination of goods and services. Some consumers in some African countries have suffered with regards to pricing. According to Baye (2010), consumers do not have a say in the price determination of some services because the providers of such services enjoy the market monopoly. However, the free market economy is the best and only realistic alternative for determining the allocation of resources in an economy because of the following: i. Competition (Pmiranda2857, 2009; Rothbard, n.d.). Without competition, the free market economy will not be what it is supposed to be. The competition between the producers is the driving force in this market, providing the consumers with the most favourable product at the most affordable price. According to Pmiranda2857 (2009), a new product is priced high in the market. After sometime, the major competitors in the market begin to imitate the innovation in the market. This leads to price reduction in the once expensive product since new and similar products begin to emerge. Pricing therefore becomes a sensitive issue in competition. Rothbard (n.d.) also concluded that competition leads to the betterment in the standards of the market competitors compared to other markets. ii. It promotes entrepreneurship and innovation (Pmiranda2857...
Words: 3199 - Pages: 13
...arguments for and against raising the minimum wage are almost unavoidable in the labor market, with each side having individually strong points. Advocates say that anyone who works 40 hours a week or more deserves to earn a decent living wage and get out of poverty, while opponents argue that high wages cost jobs. Most of the arguments for increasing the minimum wage are more emotional pleas and theories with very little evidence for achieving the desired outcome. The truth is that raising the minimum wage does not lead people to get out of poverty, but what it does is make it more difficult for younger workers to find entry-level jobs to build their skills. By raising the minimum wage, experts argue that it will make it more difficult for younger workers entering the workforce to get a job. Employers will be hiring workers with more experience and skills, since they can attract these workers with higher wages. Therefore, raising the minimum wage may be causing more harm to a younger workforce looking to find their first job to gain relevant work experience. Our country needs to focus on the inconvenient truths about the real impact around raising the minimum wage. Some of these inconvenient truths are highlighted by the research that clearly shows how raising the minimum wage may cause more harm than good, and have significant consequences to the younger and entry-level workers vs. the emotional theories that state increasing the minimum wage will get more people out of poverty...
Words: 2622 - Pages: 11
...Should minimum wage increase? “The bottom line is that five million low-income Americans working full time for minimum wage, deserve a raise,” says Jim Clyburn. The argument that has continued for years is whether the American federal government should increase the minimum? The two opposing sides on this argument are the Republicans and the Democrats. The Democrats are for minimum wage to increase, unlike the Republicans, who are against it and think of it as a job killer. There are many reasons why the Democrats are for the increase of minimum wage. Currently, there are approximately 3.8 million people who are working at minimum wage or below it. Fewer than one in four minimum wage workers are teenagers and more than half are 25 or older. (Dickinson) If minimum wage were raised to $10.10 it would trim payrolls by less than one-third of one percent, which would help approximately one million Americans out of poverty. It has been proven by the Congressional Budget Office that the raise will not affect the number of jobs as much as people think, and the increase will accomplish more than just harmful situations. There should have been a consistent raise in minimum wage from 1968 to now, but there has not been. The federal government minimum wage should be close to $20 an hour. Tax money could potentially fund less food stamps, welfare, and other financial support for this to occur. A family of four trying to be successful and build their family is living on the earnings of being...
Words: 1107 - Pages: 5
...the minimum wage, the time is now,” said Delegate Derek E. Davis, of Price George’s County. The increase in minimum wages has been a topic that has been on the rise with much controversy involved. President Obama wants state and lawmakers to increase the minimum wage from $7.25 to $10.10 per hour by 2018. Connecticut was the first state to pass the law, which will increase their minimum wage to $10.10 by January 1, 2017. Maryland is a year and half behind them, making the minimum wage $10.10 by July 1, 2018. The reason for Maryland’s delay is because they want to give businesses more time to adjust to the new and increasing price. The increases will be in steps. The first increase will be from now until July 2018, and will increase to $8 per hour on January 1, 2015. The second increase will be to $8.75 per hour in July 2016. The third increase will be to $9.25 in July 2017, and then the final increase to $10.10 in 2018. The graph below, from the congressional budget office website, shows the increases of wages over the time period. President Obama commended Martin O’Malley and other lawmakers for “leading by example” in hopes that congress will follow. However, some counties have been setting their minimum wages even higher than $10.10. Montgomery and Prince George’s counties have approved their minimum wage increase to $11.50 by 2017. However, businesses are going to be allowed to pay a lower training wage to workers under 20 years old. However, this increase in wages has...
Words: 874 - Pages: 4
...Raising the minimum wage will not help the economy but hurt it Rough Draft Jody Dunham Course Name (i.e. EN102 English Composition II) Mrs.Romera 09/05/2014 Miller-Motte College Online Programs Raising the minimum wage will not help the economy but instead put more people on state assistance. When looking into a few resources about the effects the minimum wage raise will have on the economy I have found some pretty devastating results that show how the economy will pay for this so call raise. The one that everyone thinks will save us all from an economic collapse. If you raise the minimum wage you must also raise the cost of living to match the pay increase. Here, I show you an example of this “Fast food restaurants would have to raise prices by nearly two-fifths. This would cause sales to drop by one-third and profits to drop by over three- quarters.” (Shark, James) “As it is the minimum wage is already $3.30 less than it was in the year 1968, and the data does not reveal a significant link to unemployment.” (Cassidy, John) However, this is with the minimum wage as it sits now without a marginal increase. If it increases dramatically the cost of living increases dramatically too. As with any situation when you spend more you must pay for it from somewhere else. “The higher wages are not free money. The increased cost must either be absorbed by either an employer, which is impossible for an employer who already operates on a shoe string profit margin. Otherwise...
Words: 908 - Pages: 4
...Increasing the Minimum Wage Jacqueline S. Nock May 19, 2014 Abstract The issue of minimum wage increases has been controversial since the inception of the minimum- wage law in 1938. The minimum-wage law, which includes child labor laws, was put into place to protect American workers from exploitation and poverty during tough economic times (Schuldt, Robert; Woodall, Davis; Block, Walter E., (2012), par.4). Although the law accomplished what it was intended to at the time, increases in the minimum wage over the years have produced higher unemployment rates and higher poverty levels. As the minimum wage increases, employers are forced to eliminate employees who are not working up to the current minimum wage level and hire better-skilled people who are worth the wages they are paid. Increasing the minimum wage causes an increase in unemployment among certain populations for this very reason. Completely eliminating the minimum-wage law is not the solution to the problem, but if the minimum wage remains at its current level for a few more years, it might motivate minimum wage earners to do more to protect their own financial future. The History of Minimum-Wage Law President Franklin D. Roosevelt signed the federal minimum-wage law into effect in 1938. It was part of a larger bill called the Fair Labor Standards Act. The minimum-wage law was created to protect workers from not being paid a fair wage for the work they perform. It guaranteed workers a fair wage, ensured safe working...
Words: 1107 - Pages: 5
...Detecting Media Bias HUM/111 Critical and Creative Thinking February 9, 2014 The article I chose for my critical evaluation was in the Seattle Times, published December 4, 2013, titled “Call for $15 Minimum Wage Moves North to Seattle”. While all parties mentioned in the article agreed on 1) The minimum wage in Seattle does not cover the cost of living, and 2) The city’s minimum wage does need to be addressed. They do not agree on the details like how quickly to move on it and how to put it into place. The article was accurate in the information that was reported, but some information was ignored. For example; Will an employee who is making $15 today ($5.81 more than the current minimum wage) be forced to take, what would essentially be, a pay cut or would that person have their salary raised to match that of the $15 minimum wage co-worker? Another point only showing one side of the issue, the mayor, talking about phasing in the new wage, was quoted as saying, “[starting with] city workers and extending to employees of national fast-food chains and retailers”. Another side of this would be the fairness issue to the employees that aren’t affected by for years, while the minimum wage is phased in, or at all, if some businesses are exempt. A person could not afford to continue living in Seattle if they could never reach the imposed $15 minimum wage. The news article did not cover alternative views such as, local and surrounding area business owners and...
Words: 566 - Pages: 3
...Theory b. Goal setting Theory c. Equity Theory d. Expectancy Theory Payment is one of factors which can motivate the employees. Appropriate payment will avoid employees from the dissatisfaction but inappropriate payment will demotivate the employees. One of demotivation effect is decreasing productivity. The human resource department should maintain the payment according to employee’s needs and the laws. The human resource department can determine the salary based on employee’s position and job. But the payment must not be below the minimum wage. Beside the based salary, human resource department can apply these the payment plan: a. Piece-rate pay plan b. Profit sharing c. Gain sharing 2. The Problems Minimum wages noticeably increased between 2012 and 2014, average wages have not maintained the same pace of growth. This trend highlights that the minimum wage fixing mechanism is still the most predominant mechanism through which wage increases are achieved in Indonesia....
Words: 1445 - Pages: 6
...Teamwork & Motivation Teamwork and motivation are both essential components many individuals, companies, and organizations use to achieve some type of personal accomplishment or goal for the company through managers and other peers within the workplace. Teamwork is established when the members of a team, collaboratively, achieve a specific goal. This is recognized through the strategies, procedures, and other methods that members of a team use to reach that goal. Motivation is recognized through conditions that account for the level, direction, and persistence of effort used at work. (Schermerhorn, pg. 102) These conditions, either mentally or from the environment, promote the individual or group of people to perform and fulfill certain actions to achieve a goal. As the owner of a small business of fifty employees, there are situations that can occur that can ultimately either cause the business to be successful, or to fail. My company creates widgets; cloned from a widget that is known nationally. The WooWoo is a less expensive widget and is also more readily available to obtain, whereas the original widget is not. Our company’s sells are high which is great for the company, but unfortunately there are a lot of defects in our widget, which has cause costs for the product to be more expensive. Another issue that has transpired would be with our delivery methods. Throughout the company, we have four departments that employees work in: sales, assembly, technology, and administration...
Words: 1803 - Pages: 8
...Another incentive to increase the minimum wage is the fact that living costs simply do not add up for minimum wage workers. That is to say, the current minimum wage simply does not match the current living wage for most of these Americans. A living wage is essentially the income necessary for a person to provide for themselves or their family. In a 2014 article for CUNY’s New Labor Forum, Peter Dreier recalled the introduction of the term “living wage” itself removed stigma attached to low-wage workers because it revealed the problem not as a situation of people who are in poverty due to bad decisions and lack of intelligence or motivation but rather as a situation where mothers, fathers and children’s can’t even make the means to meet their basic physiological needs despite working full-time, (Dreier, 2014). Economists calculate recommended living wages based on the cost of living in a given area and the housing size as well if it is a single parent household. According to the U.S. Department of Labor, the current minimum wage was determined by amendments passed by the Fair Labor Standards Act in 2007 that proposed it would be incrementally be raised to $7.25 per hour effective on July 24, 2009, (U.S. Department of Labor). This rate has not increased since then despite ever-increasing living costs and despite the fact that productivity has risen, where productivity is measured by how much output can be produced in an average hour of work. According to analyst Lawrence Mishel...
Words: 655 - Pages: 3
...on economic inequality Maastricht University | | | | School of Business & Economics | | | | Place & date: | 18th November 2014 | | Name, initials: | Große Entrup, Carina | | ID number: | I6096321 | | Study: | International Business | | Course code: | ebc1009 | | Group number: | 46 | | Tutor name: | Emre Ergin | | Writing tutor name: | Kirsty Donald | | Writing assignment: | Main Paper (Task 10) | | number of words: | 1990 | | carina.grosseentrup@maastrichtuniversity.nl Table of Contents 1. Introduction 2. Government intervention 3. Government intervention to reduce income inequality 3.1 In-kind transfers 3.2 Minimum wage 3.2.1 Effects of minimum wage on labour market 3.3 Income tax 4. Conclusion 1. Introduction Although income grew by almost three percent per year for all income classes in the period from 1950 to 1980, the ones that were mostly blessed with the highest income growth were the top earners (McDowell, 2012). Income can differ enormously between the different classes of a society and the range between the top earners and those at the bottom of the society becomes larger and larger. Income inequality is a wide discussed topic by all social classes. The well earning upper-class, people who have to struggle with a minimum living wage and the shrinking middle-class, which has to worry most about its future living situation, are affected by it (Mankiw, 2012). Economic inequality...
Words: 2340 - Pages: 10
...the additional effects raising the minimum wage income has on society. The United States low wage workers, namely the fast food industry workers are currently demanding higher wages. We will discuss the effect of those higher wages to businesses, the workers and those who we would not think to be affected. Effects of Minimum Wage Increases Chapter 1 Introduction Anyone who watches the local or national news has heard of the recent debate over raising the nation’s minimum wage requirements. Employees of McDonald’s, Wendy’s and Burger King are protesting in the streets and going on strike demanding a $15 per hour minimum wage (Fast Food Workers). These restaurant chains and others do not believe the minimum wage should be raised to $15 per hour for fast-food workers. There are many arguments to support both the demand to raise the minimum wage and not to raise the minimum wage. This paper will focus on different arguments and the impacts of raising the minimum wage will have on society from different angles, the first being how employers may respond to the wage increase by reducing the amount of employees they employ. The second focuses on who the mandated increase will most likely impact. And the third and final being the artificial inflation effects on the consumer. History Raising the minimum wage is not a new idea for the United States. In 1938 congress passed the Fair Labor Standards Act (FLSA) which ensured minimum wage of 25 cents per hour (USDofL). The...
Words: 2140 - Pages: 9
