Impact of the Minimum Wage in the USA

, , Leave a comment

What is a minimum wage?

A minimum wage is the lowest remuneration paid to the employee by the employer as provided by law.

Which laws regulate minimum wage in America?

The United States of America Labor Department established the Fair Labor Standards Act (FLSA). FLSA was established to regulate basic minimum wage and overtime pay standards. However, the aforementioned Act fails to address issues such as: severance pay, sick leave, vacations, and holidays. Concurrently, the Act has enforced other labor-related laws. They include: Davis-Bacon and Related Acts, Service Contract Act, Contract Work Hours and Safety Standards Act, Wash-Healey Public Contracts Act, Family and Medical Leave Act, and the Immigration and Nationality Act of 1990.

Which parties are affected by the minimum wage?

Employers and the employees are affected by the minimum wage requirement.

What is the current minimum wage required by law in America?

The current minimum wage in America required by law is $7.25 per hour.

What is the debate on minimum wage all about?

The ongoing debate on minimum wage has brought contention between the employer and the employee. It is important to note that the employee is at liberty to request an increase in her minimum wage. In the same fashion, the president of the United States sees fit that the minimum wage should be increased from $7.25 to $10.00 per hour.

What is the minimum wage per state?

All states are expected to meet the minimum requirement. Although this may be true, states differ on the minimum wage requirement. Washington, DC, set its minimum wage to $10.50. In Vermont, the minimum wage is $9.15. Unfortunately, there are states with low minimum wages. Georgia and Wyoming have the lowest minimum wage at $5.15. It is of equal importance to note that Seattle has chosen to increase its minimum wage to $15.00 per hour by 2021.

What are the pros of increasing the minimum wage?

  1. Increase in minimum wage, increase in the worker’s income.

An employee whose minimum wage has been increased can earn more money.

  1. Increase in minimum wage, increase in the economy.

An employee whose minimum wage is increased is in a position to purchase more products, which are taxed. This leads to an increase in the economy.

  1. An increase in minimum wage will create more jobs.

According to the report by Economic Roundtable, raising the minimum wage to $15.25 per hour by 2019 would result in $5.9 billion earnings for more than 700,000 workers, thus more jobs, an equivalent of 46,400.

  1. Regulate under employment.

Setting a reasonable minimum wage will reduce exploitation of employees by their employers, therefore reducing under employment.

What are the cons of increasing minimum wage?

  1. Dense population

States that have the highest rate of a minimum wage will experience high population.

  1. Transfer of jobs

Most jobs will move to states that have the least minimum requirement.

  1. Reduce assistance

Most low-earning jobs are of assistance in nature. For instance, there will be less assistance in the supermarket.

  1. Loss of jobs

Due to an increase in the minimum wage, most employers will be forced to lay off some of their workers in order to continue with a profit-related business.

  1. Increase in work for the low-income workers

For an employer to be able to cash out his money, he will be forced to increase the amount of work for an increment. Equal money for the services rendered.


An increase in minimum wage is a necessary evil. It leads to poverty alleviation.

Tea Time Quiz

[forminator_poll id="23176"]

Leave a Reply