A Macro Economical View And Logical Analysis Of The Problems Facing The Mandates Of Raising The Minimum Wage

1410 Words May 21st, 2016 6 Pages
A Macro-economical View and Logical Analysis of the Problems Facing the Mandates of Raising the Minimum Wage

INTRODUCTION Throughout recent American history, there have been a variety of pushes to raise the federal minimum wage. Though it would seem to be beneficial in short term, it will have devastating effects on various sectors of the American economy in the long term.The first use of the federal minimum wage occurred during the Great Depression under President Roosevelt. In 1938, Congress put in place this law under the Fair Labor Standards Act or FLSA. Although there is a federal minimum wage, states are allowed to set their own private sector minimum wage whose only requirement is that it is equal to or higher than the federal wage. Because of this, the wages across several states and regions are widely varying. Of the fifty states in the United States, only twenty have wages equal to the federal wage. Twenty-one of them are higher than the federal wage, Washington being the highest at $9.32. The nine states that remain have wages that are lower than the federal wage, but are required to pay the federal minimum wage anyway.1 Only 5 percent of people who were employed in 2012 were paid less than or equal to the federal minimum wage.2 Due to recent mandates, employers will have to account for heightened production costs as well as their employees. This usually means decreasing hiring opportunities and cutting employee costs in any way possible, cuts that threaten…

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