Pros and Cons of Raising a Minimum Wage

Minimum Wage A minimum wage is the lowest hourly wage that employers have to compensate the workers for their service. Currently the federal minimum wage is $7.25 per hour. However, many states also have their own minimum wage laws. In those instances, the employee is entitled to the higher of the two minimum wages. In this paper we will discuss the brief history of the minimum wage law and its current legislation. We will also analyze the pros and cons of raising the minimum wage, and the merits of each argument. The minimum wage was first introduced in New Zealand in 1894. It wasn’t until 1938, that President Franklin D. Roosevelt signed the first US minimum wage law called the Fair Labor Standards Act (FLSA). The FLSA sets standards for the basic minimum wage, which required employers to pay “the federal minimum wage of 25 cents an hour in order to maintain a minimum standard of living necessary for health, efficiency, and general well-being, without substantially curtailing employment” (Fitzpatrick, 2009). Up until then, the United States had no legislation to protect workers from exploitation and therefore, “tens of thousands of workers were routinely exploited in sweatshops and factories, forced to work in horrible conditions and for pennies a week” (Fitzpatrick, 2009). Currently FLSA requires employers to pay employees a minimum wage of $7.25 and one-and-one-half-times their wage for overtime. In 2007, President George W. Bush signed into law the Fair Minimum Wage Act of 2007. The act stated minimum wage would rise from $5.15 to $7.25 within two years following a three-step schedule. The steps were: from $5.15 an hour to $5.85 an hour on July 24th, 2007; from $5.85 an hour to $6.55 an hour on July 24th, 2008; and from $6.55 an hour to $7.25 an hour on July 24th, 2009. The federal minimum wage has since remained at $7.25.
PROS AND CONS Supporters of the Fair Minimum Wage Act have insisted that raising the minimum wage will benefit a