Minimum Wage Should Be Increased

Minimum Wage Should Be Increased

Brandi L. Claxton

Averett University

ENG111 G703-FA13

December 12, 2013

Due to jobs being scarce yet plentiful workers during the Depression, Franklin D. Roosevelt signed into law the Fair Labor Standards Act.  This established the federal minimum wage at 0.25 cents per hour.  Minimum wages were needed because the employers were exploiting the workers with long hours for rock-bottom wages.

There was major competition for scarce jobs in the 1930’s which led to unfair treatment of workers.  Employees worked in filthy sweatshops and factories for pennies per week.  The U.S. Supreme Court ruled minimum wage unconstitutional indicating that it did not allow employers to set the price for his own labor.

According to Karen Holcomb (2013), eHow Contributor, stated in the article How Did Minimum Wage Begin, “President Roosevelt made work protection a key part of his platform.  After he won in a landslide, he made good on his promise.  In June 1938, Roosevelt signed the Fair Labor Standards Act.  Along with setting a federal minimum wage, it offered such protection as a 40-hour work week, safety guidelines, overtime pay, and the prohibition of child labor”.

Currently, the federal minimum wage is $7.25/hour.  Congress does not raise the minimum wage to keep up with inflation.  The minimum wage increased in three .70 cents increments: to $5.85 in July 2007, $6.55 in July 2008, and to $7.25 in July 2009.  Calculated in real 2013 dollars, the 1968 minimum wage was the highest at $10.51/hour.  The 2013 minimum wage is equal to what was paid in 1960.

While President Clinton was in office, he further revised the minimum wage regulations.  If individuals lived in places where there were both state and federal minimum wage laws, the higher wage prevails, according to the U.S. Department of Labor.

President Obama mentioned the need to increase minimum wage in his State of the Union address.  The raising of the minimum wage would help reverse the ongoing erosion of wages that has contributed to growing income inequality.  The increase would provide a modest stimulus to the economy, as increased wages would lead to increased consumer spending.  This would help the Gross Domestic Product growth and modest employment gains.

In an article by David Cooper and Doug Hall, (2013), Raising the Federal Minimum Wage to $10.10 Would Give Working Families, and The Overall Economy, A Much Needed Boost, they provided several advantages to increasing the minimum wage.  (1) Would raise the wages of about 30 million workers, who would receive over $51 billion in additional wages over a phase-in period. (2) There would be the creation of approximately 140,000 new jobs over that phase-in period. (3) Women would be disproportionately affected, comprising 56 percent of those who would benefit.  (4) Over 88 percent of workers who would benefit are at least 20 years old.  (5) All races would benefit however, non-Hispanic white workers make-up the largest share of those who would be affected. (6) About 44 percent of affected workers have at least some college education. (7) About 55 percent of affected workers work full-time, 70 percent are in families with incomes of less than $60,000, more than a quarter are parents, and over a third are married. (8) The average affected worker earns about half of his or her family’s total income.