Negative Effects Of Minimum Wage

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Nicole Bechtel Professor Nelson Organization Compensation 2/23/2018 The history of minimum wage and the positive and negative effect of an Increase: Many Americans still ask why a federal minimum wage was set and why? Another more recent question is the talk of increasing minimum wages and if the increase would result in a negative or a positive effect to the economy as a whole. Unbeknownst to many the first minimum wage law was originally enacted in 1894 in New Zealand. “The minimum wage has become a cornerstone of the United States labor system, and has a cutting edge labor law topic among employers and workers alike for decades.” A minimum wage earning is essentially the lowest wage an employer is legally allowed…show more content…
Roosevelt was running for re-election, part of his campaign was to promise workers to be constitutionally protected. After winning the election, Roosevelt signed the Fair Labor Standards Act (FLSA). The FSLA created the first set minimum wage at .25 cents per hour. “The wage was set to maintain a “minimum-standard” of living necessary for health, efficiency, and the overall wellbeing without substantially curtailing employment.” The United States federal minimum wage can only increase with action from the Congress. Over the years since the Fair Labor Standard Act was adopted, Congress has revised the federal minimum wage every few years to account for the cost of living adjustments. Since Roosevelt’s first federal minimum wage set in 1938, the wage has been increased 22 times by 12 of the Presidents. In 2009, the federal minimum wage was set at $7.25 in which is still sits today. Some states have also adopted their own minimum wage. www.minimumwage-org. According to the Center for Poverty Research, “As of today, 5 Southern states (Louisiana, Mississippi, Alabama, Tennessee and South Carolina have no minimum wage laws. Wyoming and Georgia have state minimum wage rates that are lower than the set federal minimum wage. 14 states have set laws that are set at the federal minimum wage and 29 states and the District of Columbia set a minimum wage rate higher than the federal rate. Currently Massachusetts and Washington have…show more content…
Bureau of Labor Statistics.” “Advocates for a higher wage income argue that is right to ensure that workers earn enough of a wage to live on.” According to federal labor statistics, about 70 percent of minimum wage employees, however, work fewer than 35 hours per week and thus earn proportionately less. “An employee working a 40 hour work week at the federal minimum wage would earn $15,080.00 per year. This income would leave a two person household just below the federal poverty level threshold of $15,130.00. The positive effects to increasing the federal minimum wage would be a boost to the economic stimulus. In fact, a recent study by the Federal Reserve Bank of Chicago concluded that, following an increase, spending by households with at least one minimum wage earner increased by $700.00 per quarter. Another positive effect of increasing minimum wage is workers will be more motivated to stay in their current job which in turn decreases the cost of turnover and training costs. So what are the possible negatives of increasing minimum

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