Article Analysis Essay on Minimum Wage Pros and Cons

Introduction

The article on minimum wage reviews the set minimum wage limit that was initially implemented during the great depression in 1938. The minimum wage limit was first set at 0.25 dollars every hour and has been reviewed by the Congress for approximately twenty-two times with the latest review being in the year 2009 whereby the limit was set between $6.55 and $7.25 per hour. According to the article, before the introductions of the minimum wage limit in 1819, the annual wage for an average American was approximately $380, which was considered to be far below the country's poverty line of an average of $500 annually. This led to the formation of political movements that were aimed at improving the American wages and their working conditions.

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Pressure from the movements led to various states such as Massachusetts to form minimum wage laws between the years 1912 to 1917. This first law covered, proposed that men should earn higher wages, have the privilege of contracts and could easily join various unions and rely on their protection. On the other hand the laws barred the women from accessing this privileges because, it was thought that if the minimum wage was introduced for the minors and women at a level that high enough to maintain an adequate living standards, the women would earn a certain level of protection that is not required by the male workers.

According to the article the in the year 1939 women's party argued that despite minimum wage law being designed to protect the minors and the women, it was harmful to them since the law's conditions made them less employable as compared to the men. The women's continued challenge led to the amendment of the Connecticut law in 1939 thus extending the minimum wage to both men and women and designed a precedent for the other states to abide or follow. The fair labor standard act, on the other hand, created the federal minimum wage in 1938 of $0.25 that also intended to reduce child labor.

The Population Expected To Earn the Federal Minimum Wage

According to the article, the statistics given by the United States Department of labor indicates that approximately 3.3% of the working population that is paid hourly and is aged sixteen years and above earn a federal minimum wage of approximately$7.25 every hour in the year 2015. The rest of the workers who earn wages below the federal minimum wage are the full-time students who are paid not less than 85% of the actual federal minimum wage. The disabled individuals who are paid a salary that is proportional to their productivity and the newly hired workers who are paid approximately $4.25 every hour for the first ninety working days. The article also indicates that in the year 2015 approximately 55% of the workers who were hired at or below the national minimum wage were below twenty-five years. Approximately 73% of those earning the minimum wage were the white workers while 19% were the African American and 15% were the Hispanic.

State Minimum Wage Levels and Restrictions

By the year 2018 forty-five states had set their minimum wage laws, nearly twenty-nine states had set their minimum wage limit at a higher level than the set federal minimum wage limit. The article states that when the state minimum wage is set at a higher standard than the national or federal minimum wage, the highest minimum wage tends to prevail. Only fourteen states in the United States have set their minimum wage in line with the national minimum wage. While other states such as Mississippi, Tennessee, and Alabama have not had the minimum wage legislation, therefore their workers are covered by the fair labor standard act that offers them a minimum wage of $7.25 every hour. On the other hand, the article states that there are other counties and cities in the United States that have developed and implemented legislation that enforces higher workers minimum wages compared to their respective states.

Proposal To Improve the Federal Minimum Wage in the United States

The Congress has made numerous attempts to raise the federal minimum wage from $7.25 an hour, which was set in 2007 by the fair minimum wage act. The two main attempts include the miller and Harkin proposal to increase the minimum wage to $10.10 an hour in the year 2014 where they were supported by president Barrack Obama and the proposal by the living wage movement to increase the minimum wage to approximately $15 an hour. The living wage proposal had various supporters, such as Governor Andrew Cuomo and governor jerry brown.

The Public Opinion No the Minimum Wage Increase

According to the article, the polls conducted by the University of Maryland in the year 2007 concluded that approximately 73.8% of the united states population supported an increase of the minimum wage to $9.00 an hour while 56.8 % supported the wage increase to approximately $10.10. Another poll conducted in the year 2015 found out that 505 of Republicans, 76% of independents, and 86% of Democrats supported the rise of the wage to $10.10 every hour. Generally, approximately 70% of the United States population has been in support of the increase of the minimum wage since the year 1994.

Pros and Cons of Minimum Wage Increase in the United States

Pros

Increasing the United States minimum wage will minimize the United States income inequality.

The United States is among the nations that tend to have the highest income inequality levels among the thirty-four countries forming the organization for economic cooperation and development. The article states that in the year 2012 the 1% of the united states population was noted to earn approximately 22.83% of the country's total pre-tax income leading to the to the development of the largest difference gap between the poor and the rich in the early 1920s. A reduction of inflation changed the value of the United States minimum wage from the year 1980 thus contributing to the increased levels of inequality. Also according to another research in the year 2014, the improvement of the minimum wage would minimize the income inequality.

Raising the minimum wage would minimize premature deaths and ensure a healthier population.

An increase in the minimum wage would result to tremendous health and well-being benefits; this is because the population that earns a higher minimum wage tends to consume enough food quantity, they have a higher chance or exercising and have less probability to engage in unacceptable behavior such as smoking. Engaging in good health practices and avoiding the harmful ones helps to minimize the premature deaths recorded in the country. If the wage rate is not increased in a country such as the United States, the low-income population is expected to eat an unbalanced diet, report cases of poor health, and other chronic infections. An increase of the minimum wage in Minnesota from $6.15 to $9.50 led to the largest public health achievement since the state was able to avoid all the health impacts triggered by poverty. Increasing the minimum wage would enhance the economic activities and also improve job growth.

Cons

The minimum wage increase will reduce workers income tax payment and benefits.

An example of a case of a mother working on full time while receiving a federal minimum wage of approximately $7.25 every hour will be more than $260 worse every month if the federal minimum wage is increased to $10.10. This is because, she will lose $71 to the earned income tax credit, and she will also have to pay $37 in income tax and more than $45 in state income taxes. She will also spend or lose more money on food stamps benefits and childcare subsidies. On the other hand, in most cases, the chief financial officers tend to reduce the worker's benefits in case the minimum wage is raised to $10 every hour. An example of a case of the impact of raising the federal minimum wage is that of the Seattle area organization, where the workers requested for reduction of working hours after the minimum wage was increased. This is because they would lose the increase will cause them to lose their housing subsidies while still, they are not in a good position to afford the current market rate rents.

The increase of minimum wage would disadvantage the low-level skilled workers.

As per the employer point of view, the workers with limited skills cannot justify or achieve high wages. The increase of the minimum wage has been found to minimize low skilled workers average monthly income due to the reduction in the employment rate. This is supported by another research by James who indicates that an increase of the minimum wage by 30% results to one to 3% reduction of the low skilled worker's employment rate. In case the minimum wage is increased from $7.25 to $10.10, the employees who would not have previously applied for this jobs because they can earn $8 or$ 9 will now start to apply for the job thus creating reduced employment opportunities