Minimum Wage Must Be Increased

During the Great Depression, in 1938, the federal minimum wage was passed by Congress. There were two goals in mind, the first was keeping workers out of poverty and the second was enhancing consumer spending to recover from financial losses. Today, Congress is debating on whether or not we should, once again, raise minimum wage (Lester). Raising minimum wage was useful and successful in more ways than one. First, the modern minimum wage has been unsuccessful keeping up with inflation. Second, the increased annual income in family’s lowers employee turnover rates and increases productivity levels. The minimum wage is effective in our economy, even with considering the extremely high levels of unemployment.
$7.25 an hour is the modern current minimum wage rate. This rate has been very unsuccessful keeping up with the economies current inflation rates. The value of minimum wage grew gradually between 1938 and 1968-where it came to its highest face value (Card). When Congress aborted their plans to change inflation rates gradually, they endured a severe loss. Minimum wage is 1968 was $1.60 per hour, when accommodated for inflation the minimum wage would be $10.47 today. Meaning that buying power of this wage rate has gradually declined over the years. Today’s minimum wage rate is not nearly enough to keep families out of poverty (Acemoglu). The …show more content…
The first study, T. William Lester and Michael Reich compared every county sharing a state border that had different minimum wages (Lester). The economists found that raising the minimum wage rate pulled more workers above the scarcity line of poverty and did not lower employment rates. The study was taken from 1990 through 2006, in which there were several downturns in employment. This result also shows that in tough financial periods, raising the minimum wage rate does not have a decreasing effect on employment