Minimum Wage And The Labor Standards Act Essay

830 Words Apr 25th, 2016 4 Pages
Minimum wage was introduced into American policy as part of the Fair Labor Standards Act in 1938 by Franklin D. Roosevelt. The first wage was set at $.25 an hour. The United States is not the only country that has enacted this policy, other counties include China, Canada, Brazil, New Zealand, Australia and United Kingdom to name a few. The federal minimum wage is $7.25 this was effective July 24, 2009. State governments are able to enact their own state minimum wage law, as matter of fact two states, Georgia and Wyoming have minimum wage less than the federal average and five states that do not have a minimum wage. In all states that do not have or are below the national mandate, the federal amount applies (DOL, 2016). States that have increased the minimum use that as the base and companies operating in those states abide by the state regulations. Minimum wage has always be a topic in the political arena, “liberals have seen it as a crown jewel in the fight to protect workers, while conservatives frequently cite studies that say a higher minimum wage doesn’t do much to the country’s poverty levels” (Daily Beast, 2013). In this paper we will look at the economic theory predictions, elasticity conditions would economic theory prove to be true or false and provide a graph illustrating the effect of a minimum wage.
Economic Theory Based on the GDP, America is the ninth richest country in the world (Pasquali, 2015), yet the United States has a 14.8 percent (46.7…

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