What to Do with the Minimum Wage: Counter Arguments (Part Two)

By Daniel Sperling The previous blog post What to Do with the Minimum Wage: Pro Arguments (Part One), discussed the history behind minimum wage law as well as the proponents of a minimum wage increase and their respective arguments for increasing the minimum wage. This blog post will address the arguments against increasing the minimum wage while analyzing the overall complexity of the debate on minimum wage. Just as there are a host of arguments outlined in favor of increasing the minimum wage, there are also many arguments in opposition to any minimum wage increase. The Congressional Budget Office argued that while a minimum wage increase would benefit some families by raising their household income above the federal poverty threshold, it would also eliminate many jobs. In 2012 the Economic Policy Institute estimated that nearly 800,000 jobs could be lost as a result of a minimum wage increase. The Congressional Budget Office’s report estimated that an increase of the federal minimum wage from the current rate of $7.25 an hour to $10.10 would eliminate 500,000 jobs across the labor market, although it would increase the wages of 16.5 million workers. Similarly, the Congressional Budget Office projected that an increase in [read more]

What to Do with the Minimum Wage: Pro Arguments (Part One)

By Daniel Sperling Is the minimum wage high enough today? Increasing the minimum wage could decrease poverty, benefit company productivity, and boost the economy. But is increasing the minimum wage really that simple? In 1938, the United States Congress passed 29 U.S. Code § 201, otherwise known as the Fair Labor Standards Act (FLSA), which effectively shaped the history of United States labor law and regulation. The legislation introduced many characteristics of the work force that still exist today, including the minimum wage requirement. The minimum wage is the base level that an employer can pay its employees as regulated on a federal and state/local government level. In 2007, the Fair Minimum Wage Act of 2007 was passed which gradually increased the federal minimum wage from $5.15 to $7.25 over two years.  Currently, twenty-nine states have minimum wage legislation that ensures wages hirer than the federal standard, fourteen states have minimum wage legislation equivalent to the federal government, and five states have no minimum wage legislation. Two states, Wyoming in Georgia, have minimum wage laws that actually guarantee an amount less than the federal government, meaning that employees not covered under the FLSA are subject to the lower wage, which [read more]