My Proposal

Minimum Wage of America - My Proposal

           Goal/Optimal Soultion:

•Raise the federal minimum wage to $8.75 from the previous $7.25

•Increase the minimum wage in segments over a long period of time

•Put more money into the economy to stimulate economic growth

•Helping those are trying to support a family off of a minimum wage salary

•Reduce state/federal taxes on citizens by reducing the amount of people depending on the government to provide them with food and shelter

Plan Of Action:

          Federal minimum wage reaches $8.75 by the beginning of 2016

• Raise the federal minimum wage by $0.50 every 8 months starting January 1st, 2014

•Give businesses and companies time to figure out how to  rearrange income before next minimum wage increase

•Monitor unemployment rates as minimum wage steadily increases

•States that already have minimum wages higher than the original $7.25 and projected $8.50 federal minimum wage can keep their current state minimum wage

Costs:

By keeping and raising the minimum wage, businesses are being told how much they have to pay workers instead of the businesses deciding how much each employee’s labor is worth. Unemployment is expected to rise as businesses will have to fire the workers they can’t afford to pay. Businesses are being forced to rearrange income.

Benefits:

•As the minimum wage increase to $8.75, the 2.9% of Americans currently making the minimum salary will have more money in their pockets to spend in the economy.  As inflation is rising, the value of $7.25 won’t buy as much as it did in 2007 when the minimum wage was last increased. The people who need the money the most now have more money to afford things like food and shelter instead of relying on the government to supply it for them.

Who Would Support This?

Supporters:

•The Democratic Party would definitely support my proposal. They’ve been pushing for a minimum wage increase because they believe that eventually the minimum wage should become a living wage. The democrats believe that increasing minimum wage will help bring a lot of people out of poverty while stimulating the economy. Although they’d like to see a greater minimum wage increase, they would support the presented proposal.

Non - Supporters

•The Republican Party would be against my proposal to raise the minimum wage. The republicans are more focused on working towards less government intervention in the economy, and by telling businesses they have to raise their wages exerts much government power into the economy. Minimum wage has had a history of increasing rates of unemployment, which the republicans also wouldn’t like. They believe that the federal minimum wage should stay at $7.25. 

Previous Outcomes:

•Minimum Wage Fair Act of 2007:

•Months after the minimum wage began to increase, there were no signs of a high unemployment rate

•Economy recession cannot be pinpointed on the minimum wage increase

•Companies had enough time to rearrange income before the next minimum wage increase occurred to prevent firing many workers

•After the minimum wage increase stabilized to $7.25, however, the economy fell into a recession of high unemployment. 

Intended Outcome:

•Increase money flow in the economy

•Stimulate the economy

•Provide more money to people living off of a minimum wage salary

•Cut taxes by providing people who live off of government aid with more money through their minimum wage salary

•Keep the minimum wage consistent with the rising inflation

Propaganda/Charts/Graphs

U.S. Rep. George Miller Contact Information

George MillerU.S. Rep. from California (D)

Address:

2205 Rayburn HOB

Washington, DC 20515

Phone Number:

Phone: (202) 225-2095

George Miller is a rep. from California who has been actively involved in trying to increase the federal minimum wage. 

The Current Battle for a Minimum Wage Increase

Minimum Wage in America - Current Battle for an Increase

In 2012, the Democratic House of Representatives Rep. from California, George Miller, proposed an increase in the federal minimum wage to $9.80, with 100 of the other Democratic Reps in the House supporting him (Raise the Minimum Wage). The Fair Minimum Wage Act of 2012 proposed an increase of $0.85 cents of the federal minimum wage in the span of 2 years until the minimum wage reaches $9.80 in 2014. The bill has been referred to another committee, and currently, the Fair Minimum Wage Act of 2013, proposed by the same group of people, is trying to pass its way through Congress.

2007 Proposal: Increase the Minimum Wage

Minimum Wage in America - 2007 Proposal to Increase Minimum Wage by $2.10

In 2007, the federal minimum wage increased from $5.15 to the current $7.25 by the Fair Minimum Wage Act of 2007 (The Livable Wage). Over the course of 2 years, the minimum wage increased three times by $0.70 each time until it reached the current $7.25 in 2009. Realizing that because of inflation the price floor of minimum wage needed to be increased, the act passed Congress and was signed in 2007 by Republican President George W. Bush.

Government Connections

Minimum Wage in America - Government Connections

In 1938, minimum wage was part of the FLSA, the Fair Labor Standards Act, to reduce the unfair treatment of employees by their employers (Grossman). By signing the FLSA, President Franklin D. Roosevelt enacted a federal minimum wage that was the lowest wage every employer had to pay their employees per hour. Minimum wage was created to establish a more equal workplace. Because of minimum wage, no worker should receive a low wage that doesn’t match the amount of work they were producing. Minimum wage creates equality in the workforce.

If it weren’t for the government, a federal minimum wage would’ve never have been established. The government created a price floor indicating the minimum wage that must be paid for all employees. The government is exerting much power this way, telling businesses what they can and can’t pay their workers.  If a worker is willing to work for less than the current minimum wage, they wouldn’t be able to, due to the current minimum wage laws. One of Congress’s enumerated powers it to provide for the general welfare. People in the government pushing to raise minimum wage insist that raising the minimum wage promotes general welfare, a power that Congress possesses.

Economic Connections

Minimum Wage in America - Economic Connections

Deciding what needs to be done about minimum wage has major trade-offs. Currently, there is a lot of pressure to raise the minimum wage, as many people would like to see minimum wage become a living wage. If the national minimum wage does rise significantly, employers are forced to pay their employees higher wages. Where does this money come from? Employers either have to cut costs, fire their workers, or raise prices on their products, which wouldn’t be ideal for the firm, as the demand for those products would decrease. If the government chooses to raise the minimum wage, the unemployment rate could rise in the near future. Keeping the minimum wage at $7.25 also creates trade offs. With inflation, sustaining a $7.25 minimum wage puts the workers making the minimum wage in a worse economic position (Vietz), as they won’t be able to afford things they normally could’ve.

If the minimum wage were to increase, all businesses that have employees who make minimum wage will be affected. By raising the minimum wage, it becomes hard for the businesses to find the extra money to pay the minimum wage workers, causing the unemployment rate to rise. Increasing the minimum wage would create a scarcity in the positions where individuals make minimum wage, as businesses wouldn’t want/couldn’t afford to pay more for an unskilled job.

Background

Minimum Wage in America - BACKGROUND 

The current minimum wage, in 2013, is $7.25. This has remained the same since July of 2009, even though the cumulative rate of inflation has risen 9.1%. An item that cost $15 in 2009 is now $16.37 in 2013. Although this might not seem significant to many Americans, it could be more challenging for the 2.9% of Americans that currently make minimum wage.

Minimum wage has always been a topic widely debated since it was created in 1938 as part of the Fair Labor Standards Act (FLSA). The FLSA was created by Hugo Black, a United States Democratic Senator from Alabama, and supported by President Franklin D. Roosevelt. Black’s final proposal, passed in 1938, consisted of a federal minimum wage, a maximum of 44-hours over a seven-day workweek and guaranteed “time-and-a-half” for overtime in certain jobs. It also eliminated oppressive child labor by prohibiting the employment of minors in dangerous jobs. He started drafting the proposal in 1932, but his idea to limit the amount of hours an employee can work to thirty per week created much resistance in Congress, causing Black to have to revise the act many more times before presenting it in front of Congress again. The Act finally passed, creating a minimum wage across the United States of 0.25 cents per hour. Since its introduction, the minimum wage has flexibility to rise and decrease according to the economy. 

In 2013, approximately 2.9% of Americans currently make minimum wage. Half are workers between the ages of 16 and 24, and the other half are individuals 25 and older. The percentage of workers who are over the age of 25 are those who are demanding a raise in the minimum wage. Making just $7.25 an hour is not a wage that would be able to support a person living on their own, let alone a family of 2, 3, or even 4. The 97.1% of workers who make more than minimum wage may not be directly impacted by it, but that doesn’t mean they don’t have viewpoints on it. In a recent poll concluded in March of 2013 by Gallup Politics, 71% of Americans who earn a wage higher than minimum wage support raising it. Most people believe that minimum wage should be adjusted with the rising inflation.