Federal Minimum Wage Legislation Time For A Raise Economics Essay

Since 1968 the Federal lower limit pay has failed to maintain pace with rising prices, go forthing many American workers at income net incomes significantly below established poorness thresholds. Minority workers, particularly adult females, bear the brunt of the low pay gaining load. Raising the Federal lower limit pay would significantly increase the net incomes of 1000000s of American and raising the quality of life for themselves and their households, promote economic recovery, assistance in debt decrease, protect workers from maltreatment and supply justness for American workers. This paper addresses proposed statute law, HR 6211: Fair Minimum Wage Act of 2012, and explores the demand for transition of the measure through scrutiny of the impact on American workers across demographic lines of gender, race, age and instruction. About three out of every four American workers support the statute law. The most fervent resistance to this statute law comes from corporations that continue to recognize a net income even in these current times of economic hurt.

Federal Fair Minimum Wage Legislation: Time for a Raise

The federal lower limit pay in the United States presently stands at $ 7.25 per hr without seeing an addition for three plus old ages. For excessively long, American citizens have struggled to do a life with a minimal pay that keeps them at or below the poorness degree. Individual provinces may set up their ain lower limit pay, equal to or greater than the federal rate, but the huge bulk of provinces set their minimal pay at or below the federal lower limit pay. Small likeliness of acquiring statute law passed in both houses of Congress issues, doing this a societal justness issue that needs the voice of the American people, motivating leaders in Washington, D.C. to go through statute law that will increase the federal lower limit pay and thereby increase the quality of life for about half the state ‘s population.

Proposed Legislation

Representative George Miller [ D-CA7 ] introduced H.R. 6211: Fair Minimum Wage Act of 2012 to the 112th Congress on July 26, 2012. The measure proposes an addition in the Federal lower limit pay. The Act amends the Fair Labor Standards Act of 1938 to increase the minimal pay $ 0.85 per hr in each of three back-to-back old ages, from $ 7.25 to $ 9.80 per hr. Thereafter, indexing the lower limit pay to rising prices on a annual footing eliminates the necessity of regularly suggesting amendments to this statute law. Additionally, tipped workers would have an one-year addition of $ 0.85 per hr from $ 2.13 until the tip recognition reaches 70 per centum of the regular minimal pay. At the clip of its debut, the Fair Minimum Wage Act of 2012 held merely a 2 per centum opportunity of go throughing in the House, nevertheless, the reelection of President Obama to a 2nd term shines a more optimistic visible radiation on the hereafter of the measure. ( GovTrack, 2012, H.R. 6211 ) .

Workers Affected

Who works for lower limit pay in the United States? Harmonizing to the Bureau of Labor, in 20011, 73.9 million workers in the United States, age 16 and over, work for hourly wage, doing up 59.1 per centum of all workers in the state ( pay and wage ) . Of those hourly pay earners, 1.7 million earned the predominating Federal lower limit pay of $ 7.25 per hr while 2.2 million worked for less than the Federal lower limit pay. The combined 3.8 million American workers doing at or below the Federal lower limit pay represent 5.2 per centum of entire workers paid hourly. Within these groups, about 6 per centum of adult females earn at or below the Federal lower limit pay compared to 4 per centum of work forces. Additionally, when compared by race, 5 per centum of White workers paid by the hr earned at or below the Federal lower limit pay compared to 6, 5 and 3 per centum of African Americans, Hispanics and Asians, severally ( U.S. Department of Labor: Bureau of Labor Statistics, 2011 ) .

The National Employment Law Project ( NELP ) asserts that two extremes mark the economic system. First, those gaining at or below the Federal lower limit pay see the existent value of their income steadily decreasing over clip while the cost of populating continues to lift. Second, after the creative activity of the Federal lower limit pay in 1938, the value of the pay steadily increased until 1968. From that twelvemonth on, the failure of Congress to adequately rectify for rising prices over times resulted in the value of the minimal dramatically gnawing ( NELP, 2012 ) . Using the Bureau of Labor Statistics ‘ Consumer Price Index rising prices reckoner, the minimal pay of $ 1.60 per hr earned in 1968 translates to $ 10.59 today, after seting for rising prices ( U.S. Department of Labor: Bureau of Labor Statistics, 2012 ) . Harmonizing to NELP, “ In footings of buying power, its value is 30 per centum lower today than it was in 1968 ” ( 2012, parity. 1 ) .

Social Conditionss

Each twelvemonth, the Census Bureau issues poverty thresholds from which the United States determines the official poorness rate. The thresholds represent the minimal sum of annual income needed to back up households of assorted sizes. Datas from the 2010 Census sets the current poorness threshold at $ 22,314 for a household of four ( Flowers, 2012 ) . With the current federal lower limit pay of $ 7.25 per hr, those working a standard 40 hours per hebdomad can, at most earn $ 15,080 a twelvemonth, before revenue enhancements, working all 52 hebdomads. Clearly the current federal lower limit pay exists good below the established poorness line.

The oncoming of the Great Recession of 2008 provided the increased economic justification for the proposed statute law to raise the Federal lower limit pay. Clearly, lower income groups of society feel the negative effects of the recession more than higher pay earners. Doug Hall and David Cooper ( August 14, 2012 ) of the Economic Policy Institute ( EPI ) prepared a study on pay, income and wealth, bespeaking that adult females make up about 55 per centum of workers who would profit by an addition in the Federal lower limit pay, followed by 23.6 and 14 per centum of Hispanics and African Americans, severally. Additionally, 88 per centum of American workers are 20 old ages of age and older ( Hall and Cooper, 2012 ) . Harmonizing to The Leadership Conference, a civil and human rights alliance, 26 per centum of the state ‘s work force earns less than $ 10.55 per hr with adult females and people of colour stand foring a disproportional per centum of low pay earning in the United States. They report adult females doing up 57 per centum of those working for minimal pay, stand foring 48.9 per centum of all adult females in the work force. African Americans and Hispanics make up 14 and 23 per centum of minimal pay workers, stand foring 11 and 14.8 per centum of the entire work force, severally. Overall, people of colour make up 41 per centum of those working for a minimal pay ( The Leadership Conference on Civil and Human Rights, 2012 ) .

Harmonizing to the Bureau of Labor Statistics, those with some college instruction, but no grade make up 31 per centum of the state ‘s minimal pay workers. Additionally, workers with merely a high school sheepskin or no high school sheepskin history for 29 and 28 per centum of all minimal pay earners, severally ( U.S. Department of Labor, 2012 ) . Marcovich indicates that most high rewards arise out of high-skill occupations which require a comparable sum of instruction. Technological alteration continually drives the rewards of college graduates up, but the figure gaining a college grade continues to fall behind the lifting demand. Marcovich besides reports that in 2011 the mean net incomes of college alumnuss ( bachelor grade ) came in at 65 per centum more than those with merely a high school sheepskin while those gaining professional grades “ aˆ¦enjoyed a 161 per centum premium ” ( 2012 parity. 9 ) . He points out that gaining a college grade does non needfully vouch alumnuss a good occupation. “ Falling communicating and computing machine costs are taking to the offshoring and mechanization of some occupations that were one time the horizon of well-paid professionals, from scientists in pharmaceutical labs to finance and accounting occupations ” ( Marcovich, 2012 parity. 10 ) .

Even with some disparity in reported statistics, both the Economic Policy Institute and the Leadership Conference on Civil and Human Rights clearly demonstrate that adult females and racial/ethnic minorities represent the most economically disadvantaged in American society and those who stand to profit the most from an addition in the Federal lower limit pay, peculiarly with the proviso of an one-year indexing to the rate of rising prices. Ultimately, the proposed statute law stands to convey relief and alleviation to the communities already staggering under the impact of the recession, supplying existent betterments in the lives of the working hapless in the signifier of debt decrease and a better opportunity to lift to America ‘s middle-class ( Averback, 2012 ) .

Historical Links to Previous Policies

The Fair Minimum Wage Act of 2012 amends the Fair Labor Standards Act of 1938, historically associating it to old policies. The Fair Labor Standards Act of 1938 ( FLSA ) , amended more than twenty times since its beginning. The FLSA was portion of President Franklin D. Roosevelt ‘s New Deal, set uping a national lower limit pay, puting a maximal figure of hours in the work hebdomad, set criterions for maintaining records on rewards and hours worked and prohibited child labour ( Reference for Business, 2012 ) . The Fair Minimum Act of 2012 physiques on the old statute law.

Legislation Supporters

Congressman George Miller [ D-CA7 ] has represented California in the House of Representatives since 1973. He believes in beef uping the in-between category through making occupations, bettering the economic system, doing low-cost wellness attention accessible to all, bettering public schools and doing college low-cost, safeguarding the environment and maintaining H2O supplies clean and protecting the state ‘s kids ( Congressman George Miller, 2012 ) . Congressman Miller introduced the Fair Minimum Wage of 2012, saying, “ Anyone who works difficult and dramas by the regulations should non populate in poorness. Yet 47 million Americans now measure up as the working hapless. Raising the minimal pay helps households make ends meet ” ( Kasperowicz, 2012 parity. 4 ) .

Senator Tom Harkin [ D-IA ] has served in the U.S. Senate for 28 old ages, gaining the differentiation of the first Iowa Democrat elected to five back-to-back footings. He chairs the Senate Health, Education, Labor and Pension ( HELP ) Committee. Harkins remains committed to doing certain the economic system works for all Americans. He introduced S. 3453: Fair Minimum Wage Act of 2012 in the Senate on July 26, 2012, a comrade measure to H.R. 6211 ( GovTrack, 2012, S. 3453 ) . When presenting the Act, Harkins stated, “ It is long past clip to set up a just minimal pay in our state. It is good for households, good for concern and good for our economic system, and most significantly, it is the right thing to make. People who work hard for a life should non hold to populate in poorness ” ( Tom Harkin: Iowa ‘s Senator, 2012 parity. 2 ) .

The U.S. Women ‘s Chamber of Commerce, reverse to the political orientation of its opposite number, the U.S. Chamber of Commerce, supports a Federal lower limit pay addition. Margot Dorfman, the organisation ‘s main executive, believes the revenue enhancement base would turn with an addition in the Federal lower limit pay which in bend could diminish the necessity for public aid. Harmonizing to Dorfman, female concern proprietors make up 75 per centum of the organisation ‘s 500,000 members and who, at some point in their lives, worked for minimal pay. She points out that adult females mostly work for minimal pay and many are individual parents tasked with eating and sheltering their kids ( Klein, 2012 parity. 4 ) .

Legislation Resistance

The National Federation of Independent Businesses ( NFIB ) and the U.S. Chamber of Commerce both oppose the Federal Fair Minimum Wage Act of 2012. These organisations historically stand in resistance to additions in the federal lower limit pay. For case, the NFIB believes that their near consentaneous resistance to the addition stems “ aˆ¦not merely because they do n’t hold the gross revenues volume that would warrant an addition in their labour disbursals, but because it tends to blow up rewards up and down the graduated table ” ( Klein, 2012 parity. 3 ) . Further, Patrick O’Conner, the manager of the NFIB ‘s Washington chapter claims raising the Federal lower limit pay “ aˆ¦is antic for those who ‘ve already got a occupation. It is non good intelligence for those who are looking for one ” ( Smith, 2012 parity. 3 ) .

The U.S. Chamber of Commerce historically and presently opposes additions in the federal lower limit pay. The organisation works with voluntaries from member corporations, organisations and the academic community who actively serve on commissions, subcommittees, undertaking forces and councils in its attempts to develop policies on major issues that affect concern and see those policies implemented ( U.S. Chamber of Commerce – Advocacy, 2012 ) . The Chamber asserts that increases in the lower limit pay, “ aˆ¦fall disproportionately on little concerns who are the least able to absorb such a dramatic addition in the labour costs ” ( U.S. Chamber of Commerce – Minimum Wage, 2012 parity. 4 ) . The largest concern organisation in the universe, the Chamber represents the involvement of 1000000s of concerns runing from mom-and-pop shops to big corporations, all of which depend on the Chamber being their voice in the Washington. The overall contention of those opposing the measure points to the belief that an addition in the minimal pay disproportionately burdens little concerns, specifically because unlike large concern, they offer the majority of the minimal pay occupations.

Social Justice

Income inequality represents a turning societal justness issue in the United States. During the past twelvemonth, two factors point to the turning prevalence of income inequality earning increased attending across the United State. The first consists of the top one per centum sitting at the tallness of income distribution. The 2nd remainders in the failure of Congress to guarantee a just pay for lower-income workers. Steven Marcovich ( September 17, 2012 ) , describing for the Council on Foreign Relations ( CRF ) , points out the decennaries long rise in income inequality in the U.S. wherein the top degree of earners rapidly outpaced the remainder of working Americans. From 1979 to 2007, the existent after-tax income of the state ‘s top 1 per centum saw an addition of 275 per centum. During that same clip, those in the 81-99th percentiles rose 65 per centum, the 21-80th percentiles increase merely 37 per centum and the underside percentile experienced merely an 18 per centum growing ( Marcovich, 2012 ) . Sing that societal justness looks to authorise and enable the less privileged subdivisions of society, the proposed statute law makes a positive measure in the way of accomplishing societal justness for low-income American workers.

The likeliness of corporate action seems strong. In September of 2011, Occupy Wall Street, a people-powered motion, took to the streets in New York, protesting income inequality between the top 1 per centum and them themselves, the “ 99 per centum ” ( Marcovich, 2012, para 1. ) Additionally, 73 per centum of Americans polled support the proposed statute law ( Lake, Gotoff & A ; Dunn, 2012 ) . Besides, American workers are solidly backed by a figure of labour protagonism organisation and civil rights groups equipped to mobilise citizens in demanding action. The reelection of President Obama indicates overpowering support for political action that improves the lives of the lower income sectors of American society.

Further Thought

The Fair Minimum Wage Act of 2012 constitutes much needed statute law in order to turn to the turning poorness rate in the United States. Too many kids lack the necessities of life which negatively impacts their degree of success in instruction. This in bend partly perpetuates the rhythm of poorness in this state. Too many parents must keep two or more occupations to do terminals run into, decreasing non merely their quality of life, but that of their kids. While the transition of statute law to raise the Federal lower limit pay would non work out all issues environing poorness, it holds the potency to travel a long manner toward relieving the battles 1000000s of Americans suffer in merely seeking to maintain a roof over their households ‘ caputs. In the longer term, raising federal minimal pay can bring forth positive alteration for the state ‘s economic system with people necessitating less if any public aid.

Further, such statute law represents another milepost in the battle against inequality and income spreads. Sing that the on-going recession makes the destitute poorer while the rich continue to acquire richer, the Federal Fair Minimum Wage Act represents landmark statute law that at least references some of the gross unfairnesss and instabilities in the U.S. economic system in so far as rewards and benefits are concerned.