English D323

Barack Obama, the forty-fourth president of the United States, stated: “It was the labor movement that helped secure so much of what we take for granted today. The 40-hour work week, the minimum wage, family leave, health insurance, Social Security, Medicare, retirement plans. The cornerstones of the middle-class security all bear the union label.” The labor movement was basically a movement in American history that took place in the nineteenth century to improve working conditions and help regulate the working class. Minimum wage, family leave, and health insurance are all part of the outcome that arose after the labor movement was effective. Obama is trying to say that the American people take advantage of all these federal privileges given by the government. One of the biggest of all these given privileges would be the subject of minimum wage. It is true that six and three tenths percent of Americans are unemployed. But for the people who are employed, they are struggling to live off the federal requirements of minimum wage. There are a lot of reasons as to why the minimum wage shouldn’t increase and was rejected by members of Congress several times. It is helpful in understanding to explore the myths of increasing minimum wage, the struggles people go through living off minimum wage, and the benefits of increasing the minimum wage.

There is a series of myths that goes around about living off minimum wage. There have been arguments stating that, “Increasing the minimum wage will cause people to lose their jobs.” Studies show that this is actually a myth. According to the United States Department of Labor, “… increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market.” (“Minimum Wage Mythbusters.” – U.S. Department of Labor. N.p., n.d. Web. 30 Nov. 2015. ) The United States Department of Labor is making an effort on topics of what causes increasing the minimum wage to be controversial and nearly impossible to do. There have also been concerns for what would happen to restaurants if the minimum wage were to increase.

Since 1991, the federal tip of what was considered minimum wage was two dollars and thirteen cents per hour. But states are given power to create a state statute to implement laws that would benefit their states. These state statutes have boundaries but are still effective. One of the things that are within the state’s scope of power would be increasing the state required minimum wage. Instead of following the federal minimum wage, states like California required that the employers of restaurant businesses has to pay their employees at least $9 per hour before tips. Another one of the myths that was addressed would be , “Increasing minimum wage is bad for business.” (“Wage and Hour Division (WHD).” Minimum Wage. N.p., n.d. Web. 30 Nov. 2015.) There has been research that addressed this statement. It has been proven that increasing the wages would actually decrease employee turnover as well as the cost it takes to train new employees. Employee turnover refers to the concept of employees leaving and are replaced with new employees. These are just the very few myths of many that were addressed by the United States Department of Labor.

In recent studies, it was shown that fifteen percent of Americans live under the poverty line. This doesn’t include the  twenty-one and eight tenths percent  of the Americans under eighteen living under the poverty already. Since July 24, 2009, the federal minimum wage was set at seven dollars and twenty five cents  per hour. But for the working class citizens, or middle-class, they work full wages weekly and still stay below the poverty line. It was Franklin Roosevelt’s words that said: “No business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By living wages I mean more than a bare subsistence level — I mean the wages of a decent living.” To restate what Roosevelt is trying to express; Roosevelt believed that the minimum wage and labor unions were set so that the American public can make a standard living off work. But with the cost of living increasing, this should proportionally affect the federal minimum wage.

In reality, this isn’t true. In an article, “No Longer Getting By — An Increase in the Minimum Wage is Long Overdue” by Amy Chasanov, she expressed her opinions on the topic of minimum wage. The article was published at May 11, 2004, where she stated, “The current minimum wage is five dollar and fifteen cents per hour, and Congress has not increased this rate in seven years — the second-longest stretch of government inaction since the minimum wage was enacted in 1938.” (“No Longer Getting By—An Increase in the Minimum Wage Is Long Overdue.” Economic Policy)  Chasanov is trying to tell the American public that the trend of increasing the standard of living to the minimum wage is rarely regulated. With good reason, businesses are allowed to increase the price of their goods and services, but this directly impacts Americans’ daily lives.

With the hourly wages being so low, Americans would have to put in extra shift just to survive for another day and still stay well below the poverty line. On top of all that, they wouldn’t be able to continue their standard living as prices goes up on items that aren’t nearly considered to be luxuries. Such items would include an apartment, transportation, as well as healthy eating. Chasanov believed that, “ Full-time workers who put in a full day’s work should receive enough wages to purchase the goods and services necessary to meet their most basic needs.” This shared belief between Chasanov and Roosevelt was no coincidence. The reason for there to be a federal minimum wage, according to Chasanov is: “ … lift the earnings of low-wage workers by preventing market forces from driving down the wages of the least-educated and the least-skilled workers in the labor force.” Chasanov is trying to say by increasing the wages of the workers prevents the cost of living largely affect those who are least-skilled as well as least-educated.

Following Chasanov’s many statements on the reasons for having minimum wage, she argued for the reasons that minimum wage would benefit businesses. Chasanov said, “ Routine increases in the minimum wage help alleviate discrimination against women and minorities and substitute for the market leverage these workers do not have.” Another point made by Chasanov made was that increasing the minimum wage would give the public more power to purchase their necessities as well as profit businesses. In another article, “Raising the Minimum Wage Brings Many Benefits” by Chad Stone, Stone talks about the effects of increasing minimum wage in a positive outlook. Stone said, “employers facing a higher minimum wage might demand less labor…would also pass along some of the higher labor costs to consumers in the form of higher prices, reducing their purchasing power.” Stone is trying to say that the employers would meet their quota without resulting in a net loss and instead have a net income with fewer items being purchased with the minimum wage increased. Studies found that increasing the minimum wage would pull 2.8% of the people, under the poverty line, out of it.

There has been a lot of controversial reasons as to why the minimum wage shouldn’t increase. Such reasons include the myths or effects that might happen after increasing the minimum wage. But studies has proven the reasons to be irrelevant or a ploy to stop the increase of the federal minimum wage. The only negative effect from increasing the minimum wage affects the households that make an annual of $144,600 or more by 0.4% causing them to lose money. But there are several reasons on the benefits from increasing the minimum wage that outweighs the negative effects that comes from it.

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