Premium Essay

Minimum Wage Debate

In: Business and Management

Submitted By campbellsrm
Words 3250
Pages 13
Abolish or Sustain?
The Minimum Wage Debate

Sarah Campbell
May 8, 2013


In 1938 the Fair Labor Standards Act established a federal minimum wage. Minimum wage has continuously increased throughout the years due to interest rates and the value of a dollar. Since its introduction the minimum wage has risen from 25 cents an hour to 7.25 dollars per hour in 2009. In President Obama’s recent State of the Union Address he states, “Working folks shouldn’t have to wait year after year for the minimum wage to go up while CEO pay has never been higher.” He hopes to raise the minimum wage by 2014 to 9 dollars per hour. Following the President’s support on minimum wage increase Sen. Tom Harkin (Democrat-Iowa) and Rep. George Miller (Democrat-California) formalized a proposal known as S.460, the Fair Minimum Wage Act of 2013 to increase the minimum wage by 2015 to $10.10. This proposal includes increasing the minimum wage (in three incremental increases of $.95) and then indexing it to inflation (“as prices rise, so would the minimum wage” (Cooper, Hall 2013)). Also, the tipped minimum wage (the minimum wage paid to workers who earn a portion of their wages in tips) would be increased in $0.85 increments from its current value of $2.13 per hour, where it has languished since 1991, until it reaches 70 percent of the regular minimum wage (Cooper, Hall 2013).
However, in the current tough economic times many people argue that an increased minimum wage will only hurt and that the minimum wage should be abolished altogether. We will further look into controversies on the federal minimum wage in the United States and offer some insight into what our current economy needs.
Since July 29, 2009 the federal minimum wage in the United States has remained at $7.25 per hour for non-tipped workers and 2.13 per hour for tipped workers. In 2012 4.7% of all hourly paid...

Similar Documents

Premium Essay

Debate on Minimum Wage

...The article I would like to debate: The Case for Raising the Minimum Wage If we’re going to live in one unified America, we need an economy that works for all Americans By David Cooper In this article one would be lead to believe that raising minimum wage was beneficial for everyone including our economy and should be increased more than it already has been in the past. The argument posed is that small businesses can’t afford to pay minimum wage like big corporations. Big corporations actually don’t even deal with minimum wage in general. And minimum wage jobs were created for people who are beginning in their careers, not those who want to stay in the same position. It is a base, or minimum job position. I agree that it is difficult to raise a child(ren) on minimum wage rates in today’s economy, but the statistics being used in this article are skewed to make the reader sympathize instead of stating that most minimum wage employees are under the age of 25 (Labor, modified 2013). The majority of these people are not raising children. In fact, child-bearing years in women on average have climbed from 28.4 years old to 29.4 years old over the past decade. As you can see it is over the minimum wage range for the majority of workers by 3.4 years. In the article there is no reference to the exact age range, demographics, or even family size. We don’t know......

Words: 509 - Pages: 3

Premium Essay

Minimum Wage Debate

...Haigler 10.6.14 BCOM 275 The minimum wage debate is one that has been going on since we started using the term “minimum wage”. For years people have argued what amount of money is enough to truly survive on without being below the poverty line. Chances are we have all worked for minimum wage at one point or another in our life and as we grew older and had more experience we most likely went on to jobs that paid us more and used our skills more efficiently. Minimum wage is different in many states based on the states living costs such as food, rent and more. The biggest debate right now is should we raise the minimum wage to $15. Many minimum wage workers do not believe they have enough money to get by, support a family or have any fun. Although inflation is something we must deal with I do not believe we should raise the minimum wage to $15 an hour. That is just not something that should be done anytime soon! Even our military makes less than that and they are putting their lives on the line every day for our freedom and these countries citizens. I’m all for raising the minimum wage gradually and keeping up with some of the costs but $15 for an entry-level position seems a little crazy. Robert Reich a Professor of Public Policy at the University of California at Berkeley is an advocate for the wage increase and believes that in order for these employees to survive that they’d need that amount of money. I believe that with such a high wage increase, corporations would......

Words: 604 - Pages: 3

Free Essay

Minimum Wage Debate

...the national federal minimum wage from 7.25 percent to 10.10 percent to fill the gap of income inequality. Obama wants to give America a raise. He said, “That too many Americans are working just to get by. Some are not working at all.” He wants to speed economic growth by putting more money into the pockets of the low-income families. He wants to help them get out of poverty by raising the federal minimum wage and pegging it to inflation. The President believes that this solution will help big businesses in the long run by decreasing employee training cost and cutting back on high turnovers. In contrary, Obama will hurt the people he is trying to help. “This proposal will only harm the people the President wants to help, especially teens, who have already endured more than four years of 20+percent unemployment,” Saltman said. “If the President wants to boost the economy and have an impact on the country’s unemployment rate, he needs to lower barriers to hiring, not raise them.” The minimum wage class is mostly made up of teenagers and young adults. These people are usually people with low skills and have little or no experience. Some of them are first time job seekers just starting out in the work force. Most of us at some point in our lives have started out working a minimum wage job. Why? We need the minimum wage jobs to help us gain the experience we need to climb the success ladder for a higher paying job. They are stepping stone jobs. Minimum wage jobs were not......

Words: 653 - Pages: 3

Free Essay

Minimum Wage Debate

...VA, 22108 Re: The minimum wage debate Dear Editor: I was very pleased to read your article about the minimum wage battle. This is an issue that affects so many Americans. I agree with you that President Obama faces a difficult path in his efforts to raise the federal minimum wage. I also agree that the minimum wage increase is well overdue. I understand when you stated that many Americans are living almost in poverty. I once was example of one of those minimum wage workers. In 2009 I lost a well paying job due to layoffs, and I was forced to take a job making $10.50 an hour which was above the minimum wage. Thank God I didn't have any children at that point, Because I barely made it off of that $10.50. I had to adjust my lifestyle, I also had to call my mortgage company to request an adjustment to my monthly mortgage. The mortgage company worked with me, and lowered my payments, until I was back on my feet. So I definitely think that the minimum wage should be increased. I applaud the families that are making it work, and pray that they get the raise that they deserve. It was also great to read a testimony from a minimum wage worker. Alberta Loder, and her struggle to raise her daughter. She simply needed more money hourly to provide simple things like more food, and milk for her daughter. I think that it is a good thing that you provided a break down in Alberta's monthly expenses, so that other people especially the ones that are against the minimum wage increase can see......

Words: 855 - Pages: 4

Premium Essay

Minimum Wage Debate Essay

...bringing a federal minimum wage of 25 cents into effect. FLSA was written to help workers and many supporters believed it would help those that were low-income families. Originally FLSA covered 38 percent of the labor force, mostly in the manufacturing, mining, and transportation industries (Wilson, 2012). Over the decades, Congress has increased the areas of labor force such as air transport (1947), retail (1961), construction industry, public schools, farms, laundries and nursing homes (1966) (Wilson, 2012). In the most current of time FLSA covers about 85 percent of the labor force. Since FLSA inception minimum wages have been raised a total of 22 times. The current federal wage is _____, and Arizona’s current minimum wage is $8.05 per hour. Due to Proposition 202, Arizona’s minimum wage will annually increased on January 1, 2016 and so on....

Words: 402 - Pages: 2

Premium Essay

Minimum Wage Debate Report

...The government should increase the federal minimum wage because it will not affect the employment, it will to protect/ help the poor, and the rich have an advantage over the poor. On Forbes, Harvey said, “And there appears to be something of a consensus: changes in the minimum wage have little to no impact on employment (Harvey, 2).” Harvey means that if the minimum wage were to increase, or decrease, then that would have no effect on employment. Apparently, people agree to that because statistics shows it, so why is the government hesitating when there are no costs and that they can help benefit workers? John also wrote, “Rather, they are only suggesting that such a revision would allow the law to do what it was designed to do in the first...

Words: 253 - Pages: 2

Premium Essay

The National Minimum Wage (Nmw) the UK must get a minimum level of pay. This is called: The National Minimum Wage (NMW), you can be paid more than the national minimum wage but you must not be paid less. Although minimum wage laws are in effect for many years, there are some differences of opinion still existing about the benefits and drawbacks of a minimum wage. The main aim of the national minimum wage is to reduce poverty and to reduce the level of pay differences between men and women. Other aims include reducing the exploitation of low paid workers and improving incentives for people to look for paid work in the market. While it is clear that socially and morally the NMW is a good thing, the economic benefits out of the NMW have been an issue for years. Many economists believe the minimum wage law costs the economy thousands of jobs, because they would be unable to afford to employ more people, and also because other workers would bid up their own wages in an attempt to maintain their differentials with the low-paid workers. Additionally, imposing a minimum price for anything will in general reduce the quantity that is traded. A minimum wage may improve the income of a few, but will deprive others of income. However, the government Officials in The Department of Trade and Industry say there is no evidence that the minimum wage will cost jobs, and the employment consequences of a minimum wage are not certain. An official spokesman said: "In the long run, the additional wage costs will be offset...

Words: 333 - Pages: 2

Premium Essay

Raising The Minimum Wage Should Not Be Raised

...No Economist would disagree that when you raise the minimum wage, you kill jobs for the poor. The debate to raise minimum wage has lasted for years. While it is true that the minimum wage has not kept up with inflation, that is unimportant when looking at the grand scheme of how it would affect the economy. Raising the minimum wage would cause catastrophic issues for the United States economy. The federal minimum wage should not be raised because it will hurt small businesses and increase unemployment. Raising the minimum wage will kill small businesses. Small businesses will have to raise all hourly rates, resulting in less money in the owner's pockets and the employees alike. Many employees would be laid off or have hours reduced,...

Words: 307 - Pages: 2

Premium Essay

Raising Minimum Wage Essay

...Minimum wage is one of the number one issues in America. There are debates on whether minimum wage needs a raise or stay the same. The current minimum wage in California is $10.50 per hour. Most people that work under minimum wage work more than 60 hours a week. Those people that work under minimum wage are most likely to live in poverty. People can not earn a living on minimum wage. This is why minimum wage needs to be raised. One reason minimum wage needs a raise is because it leads to a healthier population and less premature deaths. Over the past few years, fast food prices drop while the healthier food prices increase. The author states that in “many poverty-dense regions, people are unable to access affordable healthy food, even when...

Words: 526 - Pages: 3

Premium Essay

Case Study

...cultural, and ethical challenges that confront Nike’s global business are child labor laws, wages, and outsourcings of manufacturing. Nike sweatshop labor case like those described in “Nike: The Sweatshop Debate” has agitated a large sum of controversy over business ethics. The first case illustrates how Nike has inadvertly managed to oversee that those companies they subcontract do not follow international labor laws, including those pertinent to the country the employees are working from. An example is the employee Lap, interviewed in the article. The employee is exploited, “Her basic wage, even as sewing team leader, still doesn’t amount to the minimum wage . . . . She’s down to 85 pounds. Like most of the young women who make shoes, she has little choice but to accept the low wages and long hours. Nike says that it requires all subcontractors to obey local laws; but Lap has already put in much more overtime than the annual legal limit: 200 hours.” Another evident situation that challenges business ethics is the cultural depreciation in the countries where Nike contracts with manufacturer subcontractors. Countries like China and Indonesia close to non-existent labor laws, “The majority of Nike shoes are made in Indonesia and China, countries with governments that prohibit independent unions and set the minimum wage at rock bottom. The Indonesian government admits that the minimum wage there does not provide enough to supply the basic needs of one person, let alone a......

Words: 853 - Pages: 4

Free Essay

The Living Wage Movement

...The living wage movement is an economic reform movement that has become one of the most substantial public policy issues. Although, there is no absolute definition, it is repeatedly defined as an hourly salary that admits working families of four to have an income that is higher than the federal poverty line. This means that the livable wage laws often designate that hourly wages should be two to three times above the federal minimum wage. However, unlike the minimum wage, the living wage has only been discoursed on the county and city level so far. Cities and counties continuously apply the living wage for companies that have contracts with their respective cities and counties, acquire recedes from their cities or counties, other economic benefits cities and counties supply to companies, and in some cases a livable wage is required for the tourist areas of the selective city. When the Democratic Party acquired authority of Congress, as part of its "100 Hour" plan it expeditiously presented legislation to higher the federal minimum wage from the current $5.15 per hour to $7.25 per hour. The partisan debate had been, unbelievably predictable, such as, Democratic people supporting an idea of the allege involvement for poor and working families, and Republican opponents allege involvement and concern for the percussion the hike may have on small business and inclusive employment. After all, the legislation has passed both houses in differing bills. The minimum wage hike......

Words: 260 - Pages: 2

Premium Essay

The Effect of a Raise in the Minimum Wage on Employment and Profitabilty in the Rmg Sector of Bangladesh, Drawing Sources from Other Developing Countries

...22/06/15 The Effect of a Raise in the Minimum Wage on Employment and Profitabilty in the RMG Sector of Bangladesh, Drawing Sources From Other Developing Countries The study of minimum wages has led to many debates surrounding the topic whether a raise in minimum wage can kill businesses in profitability and employment or the change in profitability and employment is insignificant. This is a hot topic for policy makers in both developed and developing countries as a raise in minimum wage affects the economy in terms of economic growth, standards of living for the poor, survival of businesses and employment. A lot of research and literature has shown that a hike in minimum wages do not particularly affect the developed nations but the same hikes in developing countries can cause damage to firms depending on the size of the firms and their profitability. This paper attempts to show that the garments sector in Bangladesh (Ready made Garments Industry) faces the same dilemma. Since the Savar tragedy in late 2013 where a garment factory, Rana Plaza, collapsed which killed more than 1,100 people and injured and more than 2,500 people injured, garment workers and civil society demanded a raise of minimum wage from 3000 tk to 5,300 tk every month. This tragedy and similar events in developing countries lead us to think how businesses especially in the developing countries where wage rates and productivity are low can operate if minimum wage is suddenly increased threefold and......

Words: 2415 - Pages: 10

Premium Essay

Advantage & Disadvantages of Minimum Wage

...Introduction Minimum wage refers to the lowest hourly, daily or monthly wage an employee is legally entitled to when working. Minimum wage is in effect in a range of different jurisdictions with differences in the views on the advantages and disadvantages being disputed by people. Supporters claim minimum wage increases the standard of living for workers whilst reducing poverty. Opposite views are that if it is high enough to be effective then it increases unemployment, particularly among workers who are inexperienced or handicap, thus harming the lesser skilled workers to benefit the better skilled workers The effect on employment rates due to minimum wage rates is a highly contested policy within economics. The introduction of minimum wage into the market can lead to competitive employers cutting employment; this depends on the rate of the wage rises require to comply with the current minimum wage according to the “standard textbook model”. Other models have also been suggested in which a decline in the employment rate may not occur and in fact employment may increase. During my research I found a wide range of literature on minimum wages, particularly on the effects of a minimum wage policy in place. Though a lot of informative research was concluding I also found the argument between weather the effects and positive of negative on employment, both sides of the disagreement present a large amount of information supporting the theories. Research before the 1990’s......

Words: 2611 - Pages: 11

Premium Essay


...The Minimum Wages Act, 1948 generally specifies minimum wage rates on a per day basis,[20] and extends to the entire country and is revised within a period of not less than five years, however there is a provision to increase dearness allowance every two years. The norms in fixing and revision of minimum wages were first recommended by ILC, 1957.[21] Revision of minimum wage rates is based on a ‘cost of living index’ and wages can be fixed for an entire state, part of the state, class or classes and employments pertaining to these categories. The fixation of wages is based on the norms mentioned and a wage board (different for different industry). Under the Minimum Wages Act, State and Central Governments have the power to fix and revise minimum wages. The act specifies that the “appropriate” government should fix the wages i.e. if the wages to be fixed are in relation to any authority of Central government or Railway administration then the Central government fixes it. However if the wage rate is to be fixed or revised for a scheduled employment, the respective state governments fix it. The Centre fixes the National floor level Minimum Wage that is lower than most states' respective minimum wages.[22] The ambiguity and overlap in the jurisdiction of both these tiers of government have caused debates and controversies. One of such debates revolves around fixing wage rates of MGNREGA scheme, an employment guarantee initiative by the Central Government[23] As per Section 5......

Words: 510 - Pages: 3

Premium Essay

Raising The Minimum Wage Essay

...Minimum wage The Fair Labor Standards Act (FLSA) of 1938 established the minimum wage, overtime pay, record keeping and child labor standards (Minimum Wage - Wage and Hour Division (WHD). For the purpose of this assignment, the primary focus will be on minimum wage. The minimum wage is a price floor set at a minimum price for labor per hour. The intention for minimum wage is to help alleviate poverty, workers are guaranteed hourly pay, protection of minimum living standards, and employee labor wage equality. Currently, the federal minimum wage is $7.25 and has been in effective since July 24, 2009. Although many states have their own minimum wage laws, which may be above the federal minimum wage, states must comply with both state...

Words: 724 - Pages: 3