After into place by Roosevelt’s New Deal
After nearly a decade of American prosperity in the 1920s, the stock market crashed in October 1929. The result was the Great Depression, which “threatened people’s jobs, savings, and even their homes and farms … and put over one-quarter of the American workforce … out of work” (“Great Depression and World War II”). Americans found hope that the economic hardships of the period would end when Franklin Delano Roosevelt was elected president in 1932. He promised that a new deal to pull the country out of the depression would be formed immediately following his inauguration. Roosevelt’s first New Deal created “banking reform laws, emergency relief programs, work relief programs, and agricultural programs” (“Franklin Delano Roosevelt and the New Deal”), while his second New Deal “included union protection programs, the Social Security Act, and programs to aid tenant farmers and migrant workers” (“Franklin Delano Roosevelt and the New Deal”). One significant act put into place by Roosevelt’s New Deal was the Fair Labor Standards Act (FLSA) (Krueger 533), which, among other things, established the federal minimum wage. When the FLSA was introduced in 1938, it “set the minimum hourly wage at 25 cents” (Grossman). According to the U.S. Bureau of Labor Statistics, this was equal to about $4.37 today (“CPI Inflation Calculator”). Since its creation, the national minimum wage has increased multiple times. It currently stands at $7.25 and has not been raised since July 2009. In addition to the federal minimum wage, individual states have their own minimum wage laws. If the state and federal laws differ, employees are guaranteed the higher of the two wages (“Minimum Wage”). Currently, thirty-two states and the District of Columbia have minimum wage laws higher than the national minimum wage. In addition, seven states and the District of Columbia either already have raised or plan to raise their minimum wage to at least $12 in the next few years. Some of these — including California, the District of Columbia, and New York — even plan to eventually raise their minimum wage to $15 per hour (Brainerd). The current federal minimum wage of $7.25 per hour is insufficient, and it must be raised to $15 per hour over the course of the next eight to ten years. First of all, the national minimum wage must be increased because doing so would increase the quality of life for hundreds of thousands, if not millions, of Americans. For one thing, for a person working full-time (meaning forty hours per week), the current minimum wage is incapable of covering the basic cost of living. In his article “The Significance of the Living Wage for US Workers in the Early Twenty-First Century,” Victor G. Devinatz, a professor of management and quantitative methods at Illinois State University, compares the cost of living to the present federal minimum wage. He states that “single workers need at least $30,000 a year to meet the required cost of living … for single parents who have two children and for two-income households, the yearly salaries needed to meet necessary expenditures, including childcare, rises to $58,000 and $68,000, respectively … Given that the U.S. minimum wage is currently at $7.25 per hour, working 40 hours per week for the entire year grosses $15,080 annually” (Devinatz 126). The current federal minimum wage is grossly inadequate to cover basic living expenses, which include things like shelter, food, transportation, electricity, heat, and water. This cost does not even take into account emergencies or luxuries such as television, Internet, or cell phones. Working full-time for $7.25 per hour produces barely half of what it costs to cover living necessities for a single person. For a person with two children or a two-income household with two children, it produces an even smaller portion of the cost of basic living expenses. This means that those who work full-time jobs and earn minimum wage often struggle to make ends meet. They tend to live paycheck-to-paycheck and may be forced to work multiple jobs to cover their expenses. No person who works full-time and year round should have to struggle to provide the basic necessities for themselves or their family. The fact that this is happening to people all across the country is simply unfair. If the federal minimum wage was gradually raised to $15 per hour, a person working full-time for the entire year would gross $31,200. This covers the living expenses for a single person and provides a little extra money for emergencies, luxuries, and savings. While it does not entirely cover the living necessities of a single parent with two children or a two-income household, it comes much closer to covering the cost than the present minimum wage does. Clearly, raising the national minimum wage would improve the standard of living for Americans; therefore, it must be done. Similarly, increasing the federal minimum wage would lift masses of Americans out of poverty. It makes sense that many minimum wage workers are in poverty, as illustrated by the fact that the basic cost of living is significantly higher than the income produced by a full-time minimum wage job. According to the CNBC article “Why We Should Raise the Minimum Wage,” written by a former Labor Secretary, “the Congressional Budget Office estimated that raising the national minimum wage to $10.10 an hour from $7.25 would lift 900,000 people out of poverty” (Reich). Likewise, an article from the Economic Policy Institute states that “a comprehensive review of the literature on the minimum wage’s poverty-reducing effects … finds that nearly all studies of this relationship show that raising the minimum wage significantly reduces poverty rates” (Cooper). Nearly one million people would rise from poverty and experience a greater standard of living if the minimum wage was raised. Plus, that figure only considers a wage increased to $10.10 per hour. Imagine how many more people would be pulled from poverty if the hourly minimum wage was raised to $15. Millions of Americans, undoubtedly, would gain an improved standard of living. Since increasing the federal minimum wage to $15 per hour would lift hundred of thousands, even millions, of Americans out of poverty, it must occur. Considering the potential to increase the quality of life for multitudes of Americans, the national minimum wage must be raised. Additionally, the federal minimum wage must be raised to $15 per hour because it would benefit businesses and the country’s economy, not just the workers receiving the raise. To start, increasing the minimum wage would put more money into the economy. The Economic Policy Institute mentions that “Because lower-paid workers spend much of their extra earnings, this injection of wages would help stimulate the economy and spur greater business activity and job growth” (Cooper). Workers who earn minimum wage tend to spend their extra earnings. When people buy goods and services, businesses have a higher profit and are able to hire more workers. By increasing the pay of low-wage workers, more money is actually put into the economy, thus benefiting it. Therefore, the minimum wage should be raised. Furthermore, increasing the national minimum wage would strengthen employee loyalty. For example, Target is a nationwide corporation that has recently raised the minimum employees are paid. According to an article published in Obesity, Fitness, & Wellness Week, Target has “raised its minimum hourly wage for all team members to $11 … and committed to increasing the minimum hourly wage to $15 by the end of 2020.” The company has found that raising their minimum wage greatly improves worker loyalty. When paid more, employees tend to stay in their positions longer and work harder. This is beneficial to the company because happy workers result in happy customers. When customers are happy, they will return more often and spend more money. Well-paid workers lead to higher profits for companies. By raising the national minimum wage, businesses around the country could experience the benefits that Target has experienced. As illustrated, increasing workers’ wages also increases their loyalty, which benefits businesses. Overall, raising the federal minimum wage would be beneficial not only for the employees themselves, but also for companies and the American economy. One common misconception about a minimum wage raise is that it would cause an increase in unemployment. Opponents argue that businesses will not be able to afford to pay their workers more. If forced to increase their wages, companies will have to lay off workers in order to compensate for the higher cost. This, however, is not accurate. Alan B. Krueger, the 2015 Chairman of the President’s Council of Economic Advisers and a professor of economics and public affairs at Princeton, conducted a study in 1994 to examine the effect minimum wage increases have on employment rates. His study with David Card “examined employment at fast-food restaurants in New Jersey and across the border in Pennsylvania, before and after New Jersey raised its state minimum wage from $4.25 to $5.05 per hour in 1992 … they found that employment did not fall in New Jersey compared to Pennsylvania” (Krueger 535). While this is just one study looking only at fast-food restaurants, many others have been done. Economists agree that raising the national minimum wage would not adversely impact employment levels. In fact, increasing the minimum wage may even create more jobs. As stated before, when low-wage workers have extra money, they tend to spend it. This puts more money into the economy and results in more business activity and job growth. As can be seen, lifting the federal minimum wage would not increase unemployment. The opposite, decreasing unemployment, has actually been found to be more likely. So, the minimum wage should be raised nationally to $15 per hour. Another misconception on the topic is that the majority of minimum wage workers are teenagers. Opponents argue that these workers are young, middle-class people who work after-school jobs just to gain a little extra spending money. Therefore, they say, it would not be beneficial to raise the national minimum wage. In actuality, teenagers make up a minority of low-wage workers. According to the Economic Policy Institute, only 10% of American minimum wage workers are under 20 years old. More than half of minimum wage workers are between the ages of 25 and 54, with an average age of 36 years. Nearly two-thirds of low-wage employees work full-time. Most significantly, nearly half of minimum wage workers support a family, which includes a spouse, children, or both. Of these, 40% are single parents (Cooper). As illustrated, a wide variety of people are affected by the minimum wage law. Many people make their living off of minimum wage, and as stated before, it presently does not provide an adequate income for basic living necessities. Raising the minimum wage would help workers and families all across America, not just teenagers who work after-school, part-time jobs. It is important, therefore, that the federal minimum wage is raised so that Americans from all walks of life can benefit. The fact of the matter is that the present federal minimum wage is inadequate, and an increase to $15 per hour is absolutely necessary. Increasing the wage would improve the standard of living for Americans, bolster the nation’s economy, and, in general, help people all across the country. In order to protect the people and the United States for present and future generations, the national minimum wage must be raised.