Minimum Wage and Poverty

Minimum Wage and Poverty

In 1997 the federal minimum wage was raised to $5.15 an hour, but since then it has not gone up. Due to inflation, minimum wage earners have lost 17 percent of their purchasing power. People who support an increase in minimum wage say it will help reduce the levels of poverty by lifting many Americans above the federal poverty line. Others, such as small businesses, say it will increase the levels of poverty because it will cause companies to lay off low wage workers. An increase is minimum wage is very much needed because poverty in the United States is becoming a bigger and bigger issue every year. In fact, history has proven to us that minimum wage has always been a major factor in poverty (Katel 1).

In 1938 President Roosevelt put the minimum wage law, or Fair Labor Standards Act (FLSA), into action, but even then it was not an easy task. Roosevelt fought for five years to get the first nationwide minimum wage set at 25 cents an hour. The U.S. Supreme Court even showed their stance by extension in 1935, when it made the decision to nullify some provisions of the National Recovery Act, but in 1937 it changed its mind. Chief Justice Charles E. Hughes stated,

"The exploitation of a class of workers who are in an

unequal position with respect to bargaining power,

and are thus relatively defenseless against the denial

of a living wage, is not only detrimental to their

health and well-being but casts a direct burden for

their support upon the community." (Katel 9)

On March 29, 1937, the court handed down their decision. Two months later Roosevelt submitted his proposal on minimum wage to Congress (Katel 9).

In 1945 the minimum wage was increased from 25 cents to 40 cents per hour. Even with the court no longer on their side, opponents fought against the increase. Some arguments are the same as today's, such as the claim that the raise would actually hurt those it was meant to help by hitting low wage workers the hardest. Sadly, they succeeded in making both the wage requirements and its coverage weaker. For instance, workers in agriculture, retail, service establishments, and switchboard operators, were exempt from the wage laws. Also many states that had the wage laws made them only applicable to women and minors. Connecticut, New York, Rhode Island, and parts of Puerto Rico and Hawaii are the only states that passed minimum wage laws in 1945, which applied to both men and women.

President Harry S. Truman had the same belief as Presidents Roosevelt in the fact that they were both advocates for raising the minimum wage and keeping