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How Minimum Do We Want Minimum Wage?

Published onNov 07, 2014
How Minimum Do We Want Minimum Wage?

Minimum wage requirements have been the center of much political debate for quite some time.  Different politicians and political parties will use a minimum wage hike to try to attract support from individuals, or may oppose one to gain support from businesses.  This area of debate also raises the question of the choices of the various states versus the choice of the federal government and how decisions by the former can have an impact on those of the latter.

In 2007 Congress passed the Fair Minimum Wage Act of 2007 that increased the national minimum wage requirement from $5.15 an hour to $5.85 with two more increases over the next two years to bring the minimum wage to $7.25 an hour.  This act was passed following increases of minimum wage in 13 states through ballot initiatives allowing the people of each state to vote on the issue.  Currently, President Obama has urged Congress to pass a bill allowing for another minimum wage hike that would ultimately end at $10.10 an hour. Right now more than 20 states have set their minimum wage above the federal requirement.  In North Carolina, the minimum wage currently is set at the federal requirement of $7.25 an hour.

Is it possible that through ballot initiatives in various states and other support the federal minimum wage hike will be passed?  Even though Democrats have been the ones calling for a minimum wage hike, there are now many Republican politicians, particularly in the Midwestern battleground states, using minimum wage hikes as a part of their platform while the Democrats are pushing for ballot initiatives to try to get more of their likely supporters to go vote.  Likewise, support has been shown through research that a majority of businesses actually support a minimum wage hike as it would raise the standard of living in their state and give employers a better chance to hold onto their employees.  Some notable supporters of the minimum wage hike include Mitt Romney and Wal-Mart as long as it is not directed solely at them.  Even with the overwhelming support among unlikely groups of people, Republicans in the Senate still voted against a minimum wage hike in April of 2014.  With upcoming elections and many new politicians on both the left and right supporting a hike in minimum wage to gain public support, the federal increase in minimum wage is more than likely to get passed in the near future.

Railroad Wage Order from the 1940s.

With the large amount of support for a minimum wage increase, those who oppose too have reasons why there should be no increase.  The central argument is simply that a minimum wage increase could actually cause more poverty and unemployment as businesses would end up hiring fewer employees. Research from Texas A&M shows that an increase in minimum wage actually reduces net job growth because it puts a restraint on job creation.  Another argument against an increase in minimum wage is that it will inevitably lead to an increase in prices of goods and services.  It almost makes the idea of raising the minimum wage in response to inflation a “catch 22”.  Either of these problems of an increased minimum wage would negatively affect any economy.

The central question in the debate over increasing minimum wage still remains figuring out a way to increase wages for low income workers while helping the business sector in creating jobs, all with the object of reducing poverty.

* Alec Roberson is a second year law student at Wake Forest University School of Law and hopes to practice sports or tax law after graduation. He holds a Bachelor of Arts in Political Science and a Bachelor of Science in Accountancy from the University of North Carolina at Wilmington.

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