Minimum Wage Research Paper

Submitted By aiikahn
Words: 1760
Pages: 8
Open Document
Economic Impact of Minimum Wage
Roughly 3.1 million workers across the United States woke up to a little New Year’s Day present on Thursday, January 1, when increases in the minimum wage took effect in 20 states and the District of Columbia. Thus increasing the total number of states with a minimum wage above the federal wage floor to 29 according the New York Times. This hike is expected to impact 3.1 million of the 3.3 million Americans who earn the minimum wage. The purpose of this paper is to primarily analyze the impact of minimum wage on the labor market and the U.S. economy. It will briefly explore some of its background, its effects and values to individuals and families. In the end, this paper will also cover some of the benefits and drawbacks of minimum wage and why it continues to be a hot debate among individuals, businesses, and politicians.
Background
The minimum wage is a cornerstone of the United States' labor system, and has been a cutting-edge labor law topic among employers and workers alike for decades. However, the United States hasn't always had a minimum wage. Before the minimum wage was introduced following the Great Depression of the 1930s, legislation to protect workers from exploitation did not exist and there was no such thing as a national minimum wage. Because of this lack of regulation, thousands of workers were routinely exploited in sweatshops and factories, forced to work for just pennies a week under extreme conditions.
It was not until 1938 that Congress instituted the minimum wage as part of the Fair Labor Standards Act (FLSA) signed by President Franklin D. Roosevelt. (“History,” 2009). The first federal minimum wage stood at 25 cents an hour. This federal mandate not only eliminated exploitation of thousands of workers but introduced many other worker's protection laws still in effect today, including banning child labor and establishing workplace safety statutes.
Over the past 75 years the minimum wage has varied considerably in inflation-adjusted buying power. It has averaged $8.09 an hour in purchasing power in 2015 dollars. But it has ranged from a low of $4.14 an hour since 1938 to a high of $10.75 an hour in 1968.

The last minimum wage increase occurred in 2007, when Congress raised the rate in steps from $5.15 an hour that year to $7.25 an hour in July 2009. Although it remains over a dollar an hour below its historical high, todays minimum wage somewhat buys more than its historical numbers.
Over the last two decades, Congress has raised the minimum wage typically only during times of healthy economic growth and low unemployment. In 1990, Congress enacted a minimum wage increase as of April of that year when unemployment stood at 5.4 percent. Once more in August 1996, Congress voted to raise it when the rate of unemployment was at 5.1 percent. The next minimum wage hike took place in May 2007 when unemployment was marked at 4.4 percent. Congress has not voted to raise the minimum wage as the unemployment rate remained above 7.5 percent since the end of the Great Depression.
Who earns the minimum wage?
Stereotypes of minimum wage earners range from teenagers holding summer jobs to single mothers struggling to support their family. The truth as should be expected is far from it. However, the Bureau of Labor Statistics (BLS) data sheds light on who actually makes the minimum wage.
Surprisingly, only a few Americans earn the minimum wage as indicated in the chart below, and they make up a smaller share of the workforce than they used to according to DeSilver of the Pew Research Center. Based on the data from the Bureau of Labor Statistics, 1.532 million hourly workers earned the federal minimum of $7.25 an hour in 2013; nearly 1.8 million more earned less than that because they fell under one of several exemptions (tipped employees, full-time students, certain disabled workers and others), for a total of 3.3 million hourly workers at or below the federal
Show More

Related Documents: Minimum Wage Research Paper

Essay on The Impact Of Immigrants On USA

The impact of immigrants on USA Immigration is a very controversial issue in USA. It brings many pros and cons to the economy and society as a whole. The 1990 Immigration Act allows 700,000 to legally immigrate every year. But approximately 12 million illegally immigrate. Republicans usually tend to argue that immigrants cost too much money. According to Federation for American Immigrant Reform, illegal immigrants cost California's education system $7.7 billion each year by caring for children of…

Words 760 - Pages 4

Agency Conflicts, Managerial Compensation and Firm Variance Essay

Journal Of Financial And Strategic Decisions Volume 9 Number 3 Fall 1996 AGENCY CONFLICTS, MANAGERIAL COMPENSATION, AND FIRM VARIANCE Robert L. Lippert* Abstract This paper presents a theoretical model of the agency conflict between managers and shareholders. The problem is examined in an expected-utility-maximization scenario in which the explicit cost of the agency conflict that arises between the manager and shareholders is derived. The model determines the effect of changes in firm variance…

Words 5165 - Pages 21

Research Paper

DC 20433, USA Economic Research Service, USDA, Food and Rural Economics Division, 1800 M St NW, Room N2152, Washington, DC 20036, USA Abstract This paper examines how the distribution of earnings in rural Ghana and Uganda differs by income type and by gender. We find that non-farm earnings contribute to rising inequality, but that lower income groups also benefit due to strong overall growth in non-farm earnings. The inequality-inducing effect is driven by self-employment income; wage income, on the…

Words 6862 - Pages 28

Accrual Accounting And Income: Short Exercises

& Income Short Exercises (10 min.) S 3-1 Millions Sales revenue……………………………………………. 850 Cost of goods sold……………………………………… (290) All other expenses……………………………………… (325) Net income……………………………………………….. $ 235 Beginning cash………………………………………….. $ 75 Collections ($850 − $27)……………………………….. 823 Payments for: inventory………………………………. (380) everything else………………………. (255) Ending cash……………………………………………… $ 263 (10 min.) S 3-2 Statement Reports (Amounts…

Words 7876 - Pages 32

Immigration: High School and Respondents Essay

adaptation to the American society. This topic is of special interest to me because I was curious to find studies that conclude that second generation Dominicans are academically succeeding better than the first generation and have improved their economic status much more than their parental immigrants. This paper will include six sections. The introduction will follow literature review relevant to the topic and the succeeding sections will include the hypothesis, followed by the research design,…

Words 4019 - Pages 17

International Gold Standard

Standard 1821-1914 • Fixed exchange rate – Core countries vs. periphery countries Country Great Britain Germany Sweden, Norway and Den ma rk France, Be lgiu m, Switze rland, Italy and Greece Netherlands Uruguay USA Austria Chile Japan Russia Do min ican Republic Panama Mexico Year 1816 1871 1873 1874 1875 1876 1879 1892 1895 1897 1898 1901 1904 1905 Adjustment Mechanisms • Balance of Payment adjustments – Price Specie Flow Mechanism Fall in prices in the USA Uchanged prices abroad Surplus…

Words 953 - Pages 4

See How Your Schooling Years Affect Your Wage Essay

See How Your Schooling Years Affect Your Wage | Liu Chengcheng, Li Kairui | Course: ECONOMICS 3313EInstructor: Dr. Özden Sungur | 2012/10/15 | | Abstract | This paper will mainly study the causal relationship between an individual’s hourly wage and schooling years. As the first step to quantitatively explore this relationship we run OLS regressions using Canadian personal data on schooling years, gender, working experience and hourly wage from the Survey of Labor and Income Dynamics…

Words 5616 - Pages 23

Essay about Chapter 11 Strategic Pay Plans

which rewards support outcomes that achieve org’s strategic objectives. Employee value: rewards are meaningful to employees and influence their affiliation with org The Five Components of Total Rewards 1. Compensation: direct financial payments; wages, salaries, incentives, commissions, and bonuses. 2. Benefits: indirect payments; financial(employer-paid insurance and vacations) & employee services 3. Work-life programs: programs that help employees do their jobs effectively, such as flexible scheduling…

Words 5024 - Pages 21

GB Xiu Hu Essay

include reducing cost of wages, to occupy more market share and technology innovation that around three different potential countries are the USA, China and France. This report shows that briefly explain and justify analytical actual situation of Elecdyne and the trends of international environment could impacted for the company. SWOT and PESTEL are necessary to use. 2. International environment In 2008, the economy of world is facing severe challenges, in which the economic slowdown has been an indisputable…

Words 2371 - Pages 10

Business Strategy Essay

HND in Business and Finance Unit Name: Business Strategy – 7 Assessors: Egya Gyamfi Student: Sulaiman Adebakin Introduction In this part of the assignment I will be defining and explaining mission, vision, objective, goals & core competencies, I will also be distinguishing the difference between each point and the role they play in the operation of a business, I will be reviewing the issues involved in strategic planning and explain the different planning techniques. 1…

Words 6024 - Pages 25