Minimum Wage Vs Living Wage Analysis

There is a major difference between what’s referred to as ‘minimum wage’ and living wage’ The living wage is the amount of pay considered sufficient for you and your family to cover basic costs of living in a specific location. Economists and policymakers use this information to determine the relative financial health of workers when comparing their pay with their living costs. There is no federal living wage law. The minimum wage, established by the federal government, specifically through the Fair Labor Standards Act (FLSA), state, and local government law, sets the lowest wage an employer may legally pay their workers. The federal minimum wage, which hasn’t changed since it was set on July 24, 2009, is $7.25 per hour. That translates to
Wicks-Lim defends against the business communities’ major argument with raising the minimum wage known as the ‘ripple effect’. Business owners argue that any increase in minimum wage has a ‘ripple effect’ of increasing wages of all employees within the organization. Managers who are forced to offer increased wages to newer, less experienced employees then feel obligated to raise the pay rate of the firms more experienced employees in order to ensure that those employees pay rate adequately reflects their relative value to the organization. Business owners argue this ‘ripple effect’ extends beyond just the new hires but up through the entire organization, increasing costs and adversely effecting
The employer is presumably free to set wages at whatever level is necessary to attract workers. Eventually both sides will come up with a wage that is satisfactory to all. The free market at work. Minimum wage laws, he argues, interfere with this process. They set a price for labor that is greater than the value these workers would bring to the employer. The result is that less-skilled or less-experienced workers may find themselves unable to find any job. Thus, minimum wage laws may be hurting the very workers they purport to help. MacKenzie concludes, “Minimum wage increases adversely affect the very people whom advocates of living wages intend to help. If politicians wish to pursue sound policies, they should consider repealing minimum wage laws, especially where teens are concerned.” If people are unhappy with what they are making, they should take responsibility to negotiate higher wages, look for other jobs, or improve their education and skills to make them more