With President Franklin Roosevelt’s cries for “A fair day’s pay for a fair day’s work,” the Fair Labor Standards Act established minimum wage in 1938 (Grossman). Overtime, the minimum wage has been raised in order to account for inflation (BLS 14). However, what the overall economic impact of raising the wage will be is once again a daunting and extensive question. The controversy over raising the minimum wage seems to come from often conflicting economic opinions. While raising the minimum wage is done with good intentions, critics argue that a higher minimum wage will harm those it is actually trying to help. Raising the minimum wage, while a controversial issue, will have an overall economic impact that reaches not only minimum wage workers, but also to small businesses and to the prices of commodities.
There is nothing new about raising minimum wage. Congress has raised the minimum wage five times over the past four decades alone in an effort to keep minimum wage up-to-date. Yet, inequality between workers has risen since the last decades of the 20th century (Parks 701). For example, minimum wage is worth 31% less than it did at its peak in 1968 (Harkin 16). Recently, Senator Tom Harkin introduced the Rebuild America Act to increase federal wage to $9.80 by July 1, 2014 (Hall and Cooper 1). There will be three incremental increases in minimum wage of $0.85 for a total raise of $2.55, including tipped workers (1).
The minimum wage increase will affect 3.7 million minimum wage workers directly (Sherk para. 11). Not only will a raise in minimum wage affect minimum wage workers but also a total of a projected 28 million workers (Hall and Cooper 2). Those paid minimum wage tend to fall under certain demographics. Minimum wage workers tend to be young. They are more often women, and typically possess little education.
Minimum wage jobs are meant as a starting place for many young people entering the workforce (Sherk para. 18). Many of these workers are young adults with about a half under the age of 25 (para. 11). Still, the other half of minimum wage workers are over the age of 25, many with families. About 28% of those affected by the minimum wage increase are parents and 23% are married (Hall and Cooper 5; Sherk para. 16).
Women will be disproportionately affected by an increase in minimum wage. Women make up 54.5% of minimum wage workers (Hall and Cooper 2). In fact, women were twice as likely as men to hold jobs with an hourly rate at or below minimum wage (BLS 1). In 2012, the Bureau of Labor Statistics found that 3% of workers were men who held minimum wage jobs. About 6% of women held minimum wage jobs (1).
Many minimum wage workers are uneducated. About 22.6%, of workers have less than a high school degree (Hall and Cooper 4). Surprisingly, 42.3% of workers at or below the federal minimum wage have “some college, an associate’s or bachelor’s degree or higher” (4). Minimum wage jobs are, in theory, used as a learning...