The Minimum Wage Law Essay Example | Topics and Well Written Essays - 2500 words

The Minimum Wage Law - Essay Example This underwent a gradual but consistent decline, and by the year 2006, the minimum hourly wage could barely procure 2 gallons of gasoline. The minimum wage is not uniform across the states, and some of the states have mandated much higher minimum wages. For example, Washington obliges employers to pay $8.55 per hour. A major issue relates to the fact the minimum wage, in real dollar terms; fell by 22%, in the period 1973 to 2007. During this time the profits of the corporate sector increased by more than 50%, which significantly increased the gap between the rich and poor. In the year 2007, it was envisaged that the proposed federal minimum wage increase would prove beneficial to a large number of American workers. Approximately, 5.6 million workers are likely to be direct beneficiaries, with a 41% enhancement in pay. In addition, around 7.4 million workers are expected to derive an indirect benefit. All said and done, such benefit will be provided to some 13 million workers. The chi ef beneficiaries of this increase in minimum wages will be adults, who constitute 79% of this group. Of these beneficiaries, women constitute 59%. This increase in minimum wage serves to benefit individuals as well as families. It is important to note that women constitute half of the minimum wage earners. Consequently, the economic gender gap is reduced substantially, due to increase in the minimum wage. Moreover, 1.2 million of these workers are single parents and most of these people are women.... Of these beneficiaries, women constitute 59%. This increase in minimum wage serves to benefit individuals as well as families. It is important to note that women constitute half of the minimum wage earners. Consequently, the economic gender gap is reduced substantially, due to increase in the minimum wage. Moreover, 1.2 million of these workers are single parents and most of these people are women.5 It is indispensable to increase the minimum wage, in order to restore its value. However, the federal minimum wage does not take inflation into account. As a result, the value of the minimum wage decreases with increasing inflation. In this situation, it is necessary for Congress to enhance the minimum wage suitably. Thus, we find that the federal minimum wage is a mere 31% of the average hourly wage. 6 The burgeoning US economy makes it very difficult for the minimum wage earners to survive. This can be attributed to the continuous increase in goods and services. Unlike other workers, wh o are provided compensation for inflation, the minimum wage earners do not experience any increase in their wages. This inequitable situation has persisted for a decade. Another issue that cripples the minimum wage earner is the increase in wage inequality, due to the decrease in the real value of minimum wages, consequent to an increase in inflation. 7 An increase in the federal minimum wage does not result in an increase in unemployment. This had been conclusively established in a study conducted by the Economic Policy Institute, for the period 1996 to 1997. Furthermore, several contemporary studies have clearly shown that the market had