What is minimum wage?

The minimum wage is the lowest pay a company can offer its employees by law. The government passed and continuously works for implementation of well-framed legislature for setting the minimum wage to safeguard the working class from exploitative employers and companies. It is essential to ensure that everyone who is working receives enough payment to survive and thrive in life. It is a fundamental human right to be able to afford basic needs if you are working. The minimum wages US has been a hot topic of debate recently.

The History of the Minimum Wage in the United States of America

In the United States of America, the minimum wage is determined by federal labour law as well as a variety of state and municipal regulations. The Fair Labor Standards Act of 1938 set the wage at $0.25 per hour, or $4.81 in 2021. Its dollar value peaked at $1.60 in 1968, translating to $12.47 in 2021. It has been $7.25 per hour since 2009.

The Importance of the Minimum Wage

The minimum wage, which is supposed to safeguard employees against exploitation, has not yet kept up with inflation. As a result, employees earning the minimum wage in 2017 were paid approximately 27% less than their counterparts over 50 years ago. If the minimum wage had been increasing at the same rate as average wages in the United States since 1968, it would have been $11.62 in 2017.
The minimum wage equates to $15,080 annually. This is higher than the federal poverty level for a single individual. Therefore, if employees were trying to maintain a family on a minimum wage, they would be eligible for federal poverty support.

The plan to increase the minimum wage

According to research published in 2021 by the Budget Office, gradually increasing the federal minimum wage to $15 per hour until 2025 could help 17 million employees while also reducing unemployment by 1.4 million people. This would help 900,000 individuals to overcome poverty, potentially increase wages for another 10 million employees, reduce total economic production marginally, and add $54 billion to the national budget debt over the next ten years. Since 2009, the minimum wage in the United States of America has remained unchanged at $7.25 per hour. However, at least 53 counties and cities, as well as 29 states and the District of Columbia, have raised their compensation levels well above the federal minimum. As a result, as of January 1, 2021, they have the highest minimum wage in the United States, at 15.2 dollars. In addition, cities such as Palo Alto, California, Mountain View, California, Emeryville, California, Sunnyvale, California, and Seattle have higher minimum wages than the federal minimum level. Several companies have followed suit, such as Walmart Inc., which now pays $11 an hour as a minimum starting rate, and Amazon.com Inc., which raised its minimum wage to $15 in the United States of America and the United Kingdom.
Inflation makes the current $7.25 wage, which has remained fixed for more than a decade, less significant every year. In 2019, the United States placed 15th in purchasing power parity across 32 countries that reported minimum wage statistics to the Organization for Economic Cooperation and Development. (The top two countries were Luxembourg and Australia.) When minimum wages are calculated as a percentage of average salaries, the United States ranks last, with 22 percent, trailing Mexico, Spain, and Greece. However, after years of analysis, economists disagree over the impact of government-mandated minimum wage laws on jobs, wages, and community well-being.

The Advantages of Raising the Minimum Wage

Here are three main proposed advantages of raising the minimum wages.
•    Increasing the federal minimum wage to $15 per hour would help low-income families boost their general quality of life. Such employees would be able to cover their monthly costs more readily, including housing, car expenses, and other household costs.
•    A secondary, less visible proposed benefit of increased minimum wage is improved staff satisfaction. Not only will satisfied workers make for a much more integrated and effective staff, but they may also improve customer experience. Furthermore, if workers are happy with their jobs and compensation, they are much less inclined to quit, saving the company money on recruiting and training.
•    Supporters claim that raising the minimum wage to $15 would assist women and minorities. For example, a $15 minimum wage would improve the pay of 31% of African Americans and 26% of Latinos. Furthermore, a disproportionate percentage of minority employees live in one of the 21 states with a $7.25-per-hour minimum wage.

Disadvantages to raising the minimum wage

Here are some of the perceived disadvantages of raising minimum wages.
•    According to opponents of raising the minimum wage, small firms would suffer due to such a significant increase. A rise in the federal minimum wage will dramatically hike small businesses' operational costs and tighten profits just as they are beginning to recover from the international COVID-19 outbreak.
•    Increasing the minimum wage to $15 would also boost daycare expenditures by 21% in general in the United States. In 2019, the average hourly salary for an early childhood educator in the United States was $11.65. As a result, a nationally enforced $15 minimum wage will nearly triple labour expenses for daycare workers.
•    A further objection against the Raise the Wage Act is that state budgets are considerably diverse, with significantly distinct living expenses. A universal minimum wage could have disproportionately negative consequences for small businesses in a city with a low standard of living. For instance, having an equal minimum wage in California and Oklahoma would be impracticable since the median house price in California is $635,055, while it is only $143,173 in Oklahoma.

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