Minimum Wage
The minimum wage became an indelible aspect of the American policy landscape in 1938, with the passage of the Fair Labor Standards Act (FLSA). The minimum wage is the lowest amount an employer can pay a worker for her services. The federal minimum wage is set (or not) by Congress, although states, counties, and municipalities can set a higher (but not a lower) minimum wage than that mandated by the federal goverment.
Cry Wolf Quotes
Now, what is the effect of this law? Indeed, I admit, some will have a mandated pay raise in America. Those will be the lucky ones. Many more will have their hours cut, Mr. Speaker. Many will have their benefits cut due to this law, and many will lose their jobs. And again, thousands, thousands will be denied that opportunity to climb on that first rung of the economic ladder in America and, instead, be condemned to a life of poverty. This should not happen in America.
When we pass minimum wage legislation it says one thing, Mr. Speaker: It says to the young black in the inner city, it says to the handicapped individual, it says to the young person looking for a first time job, unless you can meet a minimum standard, we will pass a law that says it is a violation of the Federal statute to hire such a person. Mr. Speaker, we can calculate to a certainty the number of people that we will unemploy by raising the minimum wage to various levels. At $4.50, at $5, at $6, hundreds of thousands of people are denied access to the job market. Minimum wage laws create unemployment. That is a mean, vicious thing to do.
We say we're trying to help the working poor while we actually will be helping young part-time workers. There is one thing, however, upon which there is agreement. Economists from all persuasions agree that increasing the minimum wage will mean lost jobs and it will mean inflation.
The minimum wage is kinda like a sacred cow in Washington, with many lawmakers thinking it’s a win/win for low-skill workers. What if those good intentions backfired on the very people they were supposed to help? One school of thought says lowering the minimum wage will actually create more jobs.
Evidence
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States with Minimum Wages above the Federal Level have had Faster Small Business and Retail Job Growth
The authors decisively disprove the argument that the minimum wage takes a particularly cruel toll on small businesses, which frequently employ low-wage workers (and operate on thin profit margins).
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The Wage and Employment Impact of Minimum-Wage Laws in Three Cities
The Economic Policy Research analyzes the effects of minimum wage increases in Santa Fe, San Francisco and Washington D.C., in comparison with their surrounding suburbs and nearby urban centers that didn’t experience similar wage hikes.
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The Minimum Wage Merry-Go-Round
Ezra Klein neatly dismantles the usual conservative arguments against the minimum wage.
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Making Work Pay: The Impact of the 1996-97 Minimum Wage Increase
The Economic Policy Institute study shows that the Clinton-era minimum wage increases mostly supported the wages of low-income adults.
Backgrounders & Briefs
Minimum Wage Policy Brief
By Professor Stephanie Luce
The idea of minimum wage laws has been around for more than a century. They are still a good idea.
Resources
Raise the Minimum Wage is a project of the National Employment Law Project. The effort is devoted to preserving the wage floor by raising the federal minimum wage.
