Research Proposal on "Minimum Wage"

Research Proposal 5 pages (1398 words) Sources: 2 Style: MLA

[EXCERPT] . . . .

Minimum Wage

History of Minimum Wage

A federal minimum wage was first set in 1938. The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments (Wage and Hour Division).

It is regulated by the U.S. Department of Labor's Employment Standards Administration. At first this act only covered a few transportation and agricultural industries, but was amended later to include service workers and general laborers.

Originally just 25 cents per hour in 1938, the minimum wage has been adjusted 21 times over the years. Generally it's adjusted in short phases over a few years. In recent years, as a three-part step to increase the minimum wage from $5.15 that dated back to 1997, the federal wage was increased July 24, 2007 to $5.85, $6.55 per hour effective July 24, 2008. And it will be increased to $7.25 per hour effective July 24, 2009. It is also required to compensate workers overtime pay after 40 hours of work in a workweek, at one and one-half times the regular rate of pay.

Some states are operating under a state minimum wage that is already higher than the federal minimum wage. In most cases individual states have made larger adjustments to the minimum wage to account for the cost of living in their state and to protect their citizens.

Real vs. Nominal Minimum Wage

Real minimum wage is the wage adjusted for inflation by the Consumer Price Index and Nominal minimum wage is actual federal minimum wage. Nom

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inal minimum wage values ranged from $0.25/hr in 1938 to $7.25/hr as of July 2009. The adjustments of these wages to 2009 dollars will show the real value of the minimum wage.

Calculated in real dollars, the 1968 minimum wage would have been worth approximately $9.83 in 2007 dollars -- the highest since the birth of minimum wage.

The real dollar minimum wage drops during periods that Congress doesn't raise the minimum wage to keep up with inflation. The period from 1997 to 2007 is the longest extended period that the federal minimum wage was not adjusted.

Impacts on Unemployment

Heated debates among economists and policymakers about the effects of minimum wage on unemployment and the economy are the same basic arguments today as they were when the Fair Labor Standards Act was passed back in 1938.

The arguments against raising the minimum wage usually include claims about job losses and that it will impose higher employment costs on businesses with no measurable income benefits for the wage holder.

Some also argue that minimum wage has widespread negative results that go beyond unemployment. For example, higher minimum wages encourage employers to cut back on training, which would affect long-term advancement within the company in return for a small increase in current income.

Supporters of raising the minimum wage argue it will help low-income workers financially. They also argue that the current minimum wage level does not provide an adequate incentive for the presently unemployed to seek work. Also, they argue that an increase in the minimum wage will have only a very minor impact on jobs lost and the positive affect outweighs the negatives. For example, there is also likely to be a slight spillover effect as businesses adjust other workers' pay rates to maintain wage structures.

While economic theory predicts that higher minimum wages will lead to higher unemployment, some findings from recent studies seem to be mixed.

On the low end, researchers have predicted that a ten percent minimum wage hike would only cause a one percent increase in the unemployment rate. On the other end, some researchers have indications that the same ten percent hike in wages would increase unemployment by ten percent.

Furthermore, other studies have concluded that minimum wages have no effect or a positive effect on employment.

Unions and Minimum Wage

Some of the strongest advocates for a higher minimum wage are labor unions. Organized labor unions have led the fight to raise the minimum wage in six states and to give Democrats control of Congress, in part on a platform of raising the minimum wage. Yet very… READ MORE

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Quoted Instructions for "Minimum Wage" Assignment:

“

discuss the following issues in your paper

a. brief history of minimum wage

b. real versus nominal minimum wage

c. impact on unemployment

d. union and minimum wage

e. impact on poverty

How to Reference "Minimum Wage" Research Proposal in a Bibliography

“Minimum Wage.” A1-TermPaper.com, 2009, https://www.a1-termpaper.com/topics/essay/minimum-wage-history/87541. Accessed 5 Oct 2024.

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A1-TermPaper.com. (2009). Minimum Wage. [online] Available at: https://www.a1-termpaper.com/topics/essay/minimum-wage-history/87541 [Accessed 5 Oct, 2024].

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[1] ”Minimum Wage”, A1-TermPaper.com, 2009. [Online]. Available: https://www.a1-termpaper.com/topics/essay/minimum-wage-history/87541. [Accessed: 5-Oct-2024].

1. Minimum Wage [Internet]. A1-TermPaper.com. 2009 [cited 5 October 2024]. Available from: https://www.a1-termpaper.com/topics/essay/minimum-wage-history/87541

1. Minimum Wage. A1-TermPaper.com. https://www.a1-termpaper.com/topics/essay/minimum-wage-history/87541. Published 2009. Accessed October 5, 2024.

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