The minimum wage has been a debatable topic for some time. According to the Minimum Wage Overview Cover Story, in 1937, as the U.S. was recovering from the Depression, President Franklin D. Roosevelt gave his blessings on several economic programs in an attempt to stimulate the slumping economy.
One of those platforms was the Fair Labor Standards Act of 1938 or FLSA for short. Congress set the first minimum wage at twenty-five cents an hour and eventually increasing to forty cents an hour by 1945. This same act also sets in place time and a half or overtime to be paid to anyone that works over the standard work week. In 2007, the minimum wage was raised, gradually, from five dollars and fifteen cents to seven dollars and twenty-five cents an hour effective July 24, 2009.
By increasing the minimum wage people will no longer live below the poverty line, the tie to government aid can be smashed, and the amount of consumer spending will surge. Minimum wage is usually offered to the least qualified persons in the service fields, like fast food restaurant. This situation means that the least paid professions are such that either youth, people without education or people in need work in these positions, since at the moment minimum wage does not allow one to have a comfortable living, but gives a chance to survive or is a good option as a part-time job for students. Every person understands that without people who work for the minimum wage everyday life will not be as comfortable as it is since there would be way fewer services provided on every step, from restaurants to streets. Moreover, every single lowest salary is another workplace that supplies somebody with a job, meaning that there will always be demand for such positions, meaning that working conditions should be carefully taken care of. At the moment minimum wage does not allow one to pay for life with the only salary, meaning that people with such income today live below the poverty line.
The situation here seems to be controversial. Since on the one hand, there is a deep understanding of the role of jobs with low salary and services people provide while working, but no decent reward is given to these, creating a situation where no stimulus to work for the minimum wage on the position that is strongly needed. Moreover, social benefits for such positions is also unavailable in most cases, so there is a need for increasing minimum wage to assure that every job pays enough to feel like living in a civilized country, but not as someone, struggling to survive. One more factor that has to be taken into account is that people with higher salary are more motivated to work, meaning that the quality of their working results will be higher. In other words, there is a direct correlation between the productivity and payment made, so every employer should remember that it is unlikely that person who is not appropriately paid works not at the highest productivity. On the governmental level, it means that country itself is interested in increasing the minimum wage. Higher productivity of every single employee means a healthier economy that is likely to grow than one, where services provided and products developed are of a higher quality so there are higher chances that national companies will remain competitive in comparison with the players from different countries. The last, but not the least part of this question is related to the purchasing power of people nationwide.
Higher minimum wage means that the person spends more money on living, so here it is necessary to understand that the process of increasing pay is in no way merely giving money and getting nothing back, but it directly affects the general economic situation. Such state of things means that at the moment increasing minimum wage is a question of the health of economics and it is not related only to the life quality. In other words, there is a full justification for the process of increasing minimum wage, since it will likely result in the strong economic growth. As with every dilemma, this one also has another opinion, and it is entirely justified since otherwise there would be no question whether to increase minimum wage or not to do so.
One of the most influential factors that are used to support such opinion is the idea that higher minimum wages will result in decreases in the number of workplaces, since higher salaries will result in the higher expenses on the workforce, meaning that minimization of the human involvement may take place. Moreover, optimization of business processes will become one of the most popular services, saying that jobs will be cut. Another issue that is likely to become topical is related to growing prices for everything since business owners are not expected to pay extra money from their pocket voluntarily, so the buying power of every person within the nation will decrease instead of increasing it for a small group of people. In other words, a higher minimum wage is the first step towards the economic struggle for the whole country and is not a salvation that will make anyone benefit. Every supporter of the idea of increasing minimum wage has to understand that such action may hit their pocket, so people will pay for social programs not only from taxes, as they do now, but directly from their salaries. Every product will have a part of the price that is responsible for the choice of paying more to a small group of people to make their life better. This situation looks like a forcible collection of funds to support those who did not get an education, did not bother looking for a better position or just someone who does not feel like having a harder job. The current dilemma of either increasing or not the minimum wage has been bothering people for a long time, but no exact solution has been found yet.
On the one scale are the perspective of a growing economy, fewer people below the poverty line and higher quality of goods and services, while the other one has the collapse of the economy together with the increasing prices and fewer jobs available for people. One might say that each of these opinions is an extreme that is being exaggerated and he is likely to be correct since both arguments operate with the worst case scenarios to be more convincing and to assure that all perspectives are taken into account. For sure what will happen in case of increasing salaries is likely to be somewhere in between these two views. It means that there will be pros and cons of such decisions, but the deepness of both of them is hard to estimate due to the extreme number of factors needed in such analysis. The high chances are that the overall outcome will be neither beneficial nor will it damage the economic situation, meaning that the tremendous work and numerous changes have to be done to change nothing. Such state of things implies that logically there is no need to increase the minimum wage at the moment, but the factor of the public opinion should not be forgotten about.
Such state of things means that further analysis of the situation has to be conducted to take a justified decision, but at the moment there is a justification for increasing minimum wage, even though it is not economical.