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Minimum Wage Debate

In: Business and Management

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

Sarah Campbell
May 8, 2013

Abstract

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...

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