Minimum Wage at a Rise

Topics: Macroeconomics, Minimum wage, Employment Pages: 2 (578 words) Published: July 3, 2013
In 1938 the federal government established the Fair Labor Standards Act. This law marked the first time that employers were legally required to pay their employees overtime for certain jobs. When the law was first passed the country’s minimum wage was $0.25 per hour. The federal minimum wage applies to every state under Washington’s Constitutional authority to regulate “interstate commerce,” but several states have passed their own laws to raise the minimum wage above the federal $7.25 level. Nineteen states have requirements higher than the federal level, eight states are higher than $8 per hour, five states have no law of their own, and two still have level that are lower than the federal level. But you also must factor in that the cost of living differ amongst these states. The Fair Labor Standards Act has been amended twice, and minimum wage is typically increased every few years, but because of the Great Recession minimum wage has fallen behind inflation. In order for minimum wage to make up for value lost to inflation it would have to be increased from $7.25 to $10.55 (Sessions 2013). The Fair Minimum Wage Act of 2013 will help restore much of the lost value of the federal minimum wage. The act is to provide America’s lowest paid employees with a much needed pay raise while boosting the consumer spending that fuels the economy. The Fair Minimum Wage Act of 2013 is projected to raise the federal minimum wage to $10.10 by 2015, adjust the minimum wage to keep pace with the rising cost of living, and raise the minimum wage for tipped workers to 70% of the full minimum wage. This will increase more than 30 million workers’ wages. Consumer spending accounts for 70% of the United States economic activity. Wages and salaries now make up the lowest share of national income since 1966, while corporate profits are now the largest share of national income since 1950. With the Fair Minimum Wage Act of 2013 we will start to see a boost in consumer demand. The Act will...

References: NELP. (2013 ). Fair Minimum Wage Act of 2013. Retrieved from Raise the Minimum Wage: http://raisetheminimumwage.org/pages/fair-minimum-wage-act-of-2013
Richey, A. (2013). Minimum Wage Bill: Obama 's $9 Proposal won 't Increase Unemployment. Retrieved from Policy Mic: http://www.policymic.com/articles/41325/minimum-wage-bill-obama-s-9-proposal-won-t-increase-unemployment
Sessions, D. (2013, Feburary 15). Five Things You Didn’t Know About the Minimum Wage. Retrieved from The Daily Beast : http://www.thedailybeast.com/articles/2013/02/15/five-things-you-didn-t-know-about-the-minimum-wage.html
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