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Minimum Wages

In: Business and Management

Submitted By raistlin212
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A disturbing sign of decline in the American economy has caused many to sound the alarm bells. Income inequality represents a significant danger to the nation and is growing worse over time, leading the 2013 winner of the Nobel Prize in Economics to call it, “The most important problem that we are facing now” (Christofferson, 2013). A significant contributing factor to this is the stagnant minimum wage. Raising the minimum wage will not only decrease income inequality, but also raise millions out of poverty, spur consumer spending, and ultimately lead to a more efficient workplace and workforce. Therefore, America needs to adopt one of the currently proposed $10.00+ minimum wage policies being discussed in the political arena and ensure it is being used in a responsible way to fight these problems. The federal minimum wage has went without a change for nearly a decade twice, from 1981 to 1990 and 1997 to 2007. There have been many more multi-year gaps as well (Federal, n.d.) As a result, the minimum wage has not kept pace with inflation over the last 40 years. The purchasing power of the $7.25 minimum wage set in 2009 has already dropped by 5.8% by 2013 (DeSilver, 2013). Since 1968 the power of the minimum wage is down 23% after adjusting for inflation (Boushey, 2014). There is, however, another way of weighing the minimum wage instead of just against inflation. In 1968 the minimum wage was 53% of the average wage for hourly lower level employees, compared to 2013 when it had fallen to 36% as much (Boushey, 2014). This measurement shows that the people making the minimum wage today are not only falling behind their own historic levels, but also behind the workforce as a whole. This is a significant factor in why wealth inequality has increased so dramatically over the last 40 years. Luckily, these numbers can all be changed rather...

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