Minimum Wage Essays

6021 Words Jan 8th, 2002 25 Pages
History of the Minimum Wage
· 1938 -- The minimum wage was first enacted into law as part of the Fair Labor Standards Act (FLSA) of 1938. The original minimum wage applied to workers engaged in interstate commerce and the production of goods for interstate commerce. In 1938, this applied to roughly 11.0 million workers out of a total of 54.9 million workers. The minimum wage was set at $0.25 per hour.
· 1961 -- Amendments to the minimum wage law extend coverage primarily to employees in large retail and service trades as well as local transit, construction, and gasoline service station employees.
· 1966 -- Amendments to the minimum wage law extend coverage to state and local government employees of hospitals, nursing homes, and
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Before we assess the effects of minimum wage hikes, it is useful to examine the demographics of those earning the minimum wage to determine whether the policy helps low-skilled workers who support families or merely boosts the incomes of middle-class teenagers. Relatively few workers earn exactly the minimum wage--only 5.3 percent in 1995. Fewer than 10 percent of workers earned between $4.25 and $5.15.

There are two main types of minimum wage workers: youths who are earning a starting wage, often while still in school, and adult women for whom the minimum wage is a primary source of household income. In 1995, more than one-third of all workers earning the federal minimum wage were teenagers, and another one-fifth were aged 20-24. The vast majority were part-time workers, and over 60 percent of workers paid the federal minimum wage were female. Table 2 summarizes the characteristics of minimum wage workers.

Minimum wage workers are highly concentrated in the retail trade and service sectors and in small businesses. Over four-fifths of workers paid the federal minimum wage in 1993 were employed by retail trade or service establishments. More than one-half of all workers earning the minimum wage were employed at establishments with fewer than 25 employees, and about 85 percent were employed by establishments with fewer than 100 employees. In addition, a higher fraction of workers employed by small businesses are paid the minimum wage; almost 4 percent of

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