Federal Minimum Wage Legislation Economics Essay

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The federal lower limit pay in the United States presently stands at 7.25 per hr without an addition since for three plus old ages. For excessively long, American citizens have struggled to do a life with a minimal pay that sits below the poorness degree. This issue contributes to the state ‘s turning poorness rate, adversely set uping 1000000s. 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 house of Congress exits doing this a societal justness issue that needs the voice of the American people to motivate our 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.

Federal Minimum Wage Legislation: Time for a Raise

This paper addresses proposed statute law, HR 6211: The Fair Minimum Wage Act of 2012A? introduced in the House of Representatives by Rep. George Miller ( D-CA7 ) on July 26, 2012. Sing the damaging effects of structurally low rewards and the chronic incidence of pay depression and inequality, this measure seeks to right some of the instabilities by raising the minimal rewards paid to the tipped workers in a gradated and progressive mode. The cardinal facet of the statute law is that it benefits certain communities like the African Americans, Hispanics, and Women, who have traditionally been low pay earners. In this regard, the measure is a measure in the way of societal justness and to right some of the gross unfairnesss in the current system of rewards to the lower income brackets ( The Leadership Conference on Civil and Human Rights, 2012 ) . The measure has a 5 % opportunity of go throughing now. Rep. Miller and Sen. Tom Harkin ( D-IA ) are flying the measure through the house through the senate. Though the opportunity of the statute law going jurisprudence is so less, the recent reelection of President Obama is a positive development for the transition of the measure. The National Federation of Small Businesses ( NFIB ) and the US Chamber of Commerce are opposing the measure. On the other manus, the Leadership Conference on Civil and Human Rights and the Business for Shared Prosperity groups is back uping the Bill. Finally, the proposed statute law would modify the Fair Labor Standards Act of 1938 and would seek to increase the minimal pay from $ 7.25 to $ 9.8 over a period of three old ages. Sing the fact that the minimal pay determines the basket of benefits including wellness insurance, societal security etc, and the measure is historic in nature ( GovTrack.us, 2012 ) .

Description of the Proposed Legislation

H.R. 6211: Representative George Miller [ D-CA7 ] introduced just Minimum Wage Act of 2012, a measure to increase the federal lower limit pay, to the 112th Congress on July 26, 2012. The Act amends the Fair Labor Standards Act of 1938 to increase the minimal pay 85 cents in each of three back-to-back old ages, from $ 7.25 to $ 9.80 per hr. Thereafter, the indexed rate to rising prices on a annual footing represents the one-year addition. Additionally, tipped workers will have an one-year addition of 85 cent from $ 2.13 per hr rate until the tip recognition reaches 70 per centum of the regular minimal pay. S. 3453: Fair Minimum Wage Act of 2012 is a comrade measure introduced by Senator Tom Harkin on July 26, 2012 ( GovTrack.us, 2012 ) .

Communities Affected

Harmonizing to the available statistics about the communities who stand to profit from this statute law, the people of colour, Hispanics, and adult females stand to derive the most from the transition of this measure. The undermentioned infusion from the civil rights website provides an penetration into the communities who are likely to profit from HR 6211. A arresting 35 million Americans – 26 per centum of our work force – earn less than $ 10.55 an hr. Of peculiar concern is the disproportional per centum of lower limit pay earners are adult females and people of colour. 57 per centum of minimal pay workers are adult females, stand foring 48.9 per centum of all adult females in the work force ; 14 per centum are African American, though they make up merely 11 per centum of the work force ; 23 per centum are Hispanic, though they make up merely 14.8 per centum of the work force ; Overall, 41 per centum of minimal pay earners are people of colour. These statistics indicate that the proposed statute law affects the deprived subdivisions of society and benefits them more when compared to the instead privileged subdivisions. Further, many of the communities that are historically low pay earners besides correlate with high poorness incidence. Hence, the proposed statute law would convey relief and alleviation to the communities who are already staggering under the impact of the recession ( The Leadership Conference on Civil and Human Rights, 2012 ) .

Social Conditionss

The oncoming of the Great Recession of 2008 has provided the economic justification for the proposed statute law. The lower income subdivisions of society are experiencing the effects of the recession more than the higher pay earners. Further, the fact that a disproportional figure of people ( around 35 per centum of the entire work force ) earn less than $ 10 an hr indicates that the hurting of economic agony resides with lower pay earners. Hence, there is a compelling instance for presenting such statute law that would raise the minimal rewards paid to these subdivisions ( BusinessforSharedProsperity.org, 2012 ) .

With the reelection of President Obama indicating that there is overpowering support for political actions on breaking the lives of the lower income subdivisions of society, there is a valid instance for political action on this issue. As the demographic and the economic profiles of Americans who have voted for President Obama show, the overpowering nature of the authorization to break the lives of working Americans makes the pitch for political action that much more stronger ( Kasperowicz, 2012 ) .

The technological factors that influence this proposal are to make with the increasing mechanization of the American concerns that renders many low paying occupations redundant. Coupled with the rise in unemployment brought about due to the recession wherein big Numberss of lower income workers laid away, the technological facets indicate that the speed uping mechanization of concern procedures would do the occupations held by the lower income workers less secure ( Washingtonwire.com, 2012 ) .

As has been mentioned throughout in this paper, the declining societal conditions for the less privileged subdivisions of society due to a host of factors, makes the transition of this measure of import from the societal position. The fact that the lower limit pay has a knock-on consequence on the other benefits including wellness attention, societal security, and associated public assistance based benefits, the proposed statute law is all the more of import from a social point of position.

Historical Links to Previous Policies

The Fair Minimum Act of 2012 amends the Fair Labor Standards Act of 1938 and therefore, the historical links to the old policies links back to this act. Further, there have been several amendments to the Fair Labor Standards Act of 1938 wherein consecutive houses have tried to go through statute law that would raise the minimal rewards for the workers. In this sense, the Fair Minimum Act of 2012 physiques on the old statute laws including several measures taken up in the 1990s. Of peculiar note is the fact that this act is evocative of the “ New Deal ” policies followed by FDR and therefore, it is the greening of the socialist urge in the United States ( Businessforsharedprosperity.org, 2012 ) .

Two Players who would back up the Proposal

The Two Players who would back up the Bill include Congressman George Miller [ D-CA7 ] and Senator Tom Harkin [ D-IA ] . Rep. Miller has represented California in the House of Representatives since 1974. Sen. Harkin has served the US Senate for 28 old ages. Both these participants believe in beef uping the in-between category through making occupations, and procuring the rights of the low pay earners ( Harkin.senate.gov, 2012 ) . Rep. Miller in peculiar has supported the transition of measures refering to wellness attention, environmental ordinances, betterment of public schools, and steps to better the economic system. Sen. Harkins, on the other manus, is committed to doing certain that the economic system works for all Americans ( Georgemiller.house.gov, 2012 ) .

To cite Rep. Miller, when presenting the measure, non “ Anyone who works difficult and dramas by the regulations should 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 ) . In a similar mode, Sen. Harkin, when presenting the measure in the Senate, 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 ” ( Senator Harkin Press Release, 2012 ) .

Two Players who would oppose the Proposal

The National Federation of Independent Businesses ( NFIB ) and the U.S. Chamber of Commerce are opposing the measure. These organisations have historically been opposed to additions in the federal lower limit pay. For case, the NFIB believes that their near consentaneous resistance to the addition is “ 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 ) . Further, the NFIB believes that “ It is antic for those who ‘ve already got a occupation. It is non good intelligence for those who are looking for one ” ( Smith, 2012 ) . The other opposition of the measure, “ The U.S. Chamber continues to believe that increases in the minimal pay autumn disproportionately on little concerns who are the least able to absorb such a dramatic addition in the labour costs ” ( USChamber.com, 2012 )

The pertinent facet here is that oppositions of the measure point to the fact that the consequence of the addition in the minimal pay would be borne disproportionately by little concerns and would burthen them because they, instead than the large concerns, offer the majority of the minimal pay occupations. As has been noted elsewhere, raising the minimal pay affects other benefits. Hence, while the advocates argue for the measure because of the knock-on benefits that would raise the oppositions of the measure use the same logic to defy the rise since the little concerns would hold to shoulder the consequence of the increased benefits ( Klein, 2012 ) .

Social Justice

This is so a societal justness issue because the elevation of the minimal pay means that the benefits accrue to the disadvantaged and less privileged subdivisions who earn the lowest possible rewards. As the statistics quoted elsewhere in this paper indicate, the elevation of the minimal rewards would assist the lower round of the income ladder more than the others who earn higher rewards anyhow. Another of import facet here is that traditionally the lowest paying occupations were the 1s where the lower limit pay was the determiner of how much is paid and to whom. Hence, raising the minimal pay affects this subdivision disproportionately. Sing the fact that societal justness is all about authorising and enabling the less privileged subdivisions of society, the proposed statute law is so a measure in the way of realizing societal justness ( The Leadership Conference on Civil and Human Rights, 2012 ) .

The likeliness of corporate action is so relevant since the big wrapping of around 35 Million Americans stand foring 26 per centum of the work force earns less than $ 10.25 an hr. This means that support for this statute law would come from the subdivisions that stand to profit from the proposed statute law. Further, civil rights groups and groups working to progress the cause of the hapless are likely to mobilise citizens to back up the statute law ( BusinessforsharedProsperity.org, 2012 ) .

Further Thought

My personal ideas on the HR 6211 are that it is a much-needed statute law, which would turn to the turning inequality and the broad spread between the incomes of the lowest earners and the highest earners. However, I do non claim that the statute law, if passed, would take to instant solutions. Rather, the point that I am seeking to do is that such statute law would travel a long manner in making out to the marginalized and demoing them that the province attentions about them. Further, such statute law would stand for another milepost in the battle against inequality and income spreads. Sing the fact that the on-going recession has made the hapless poorer and the rich richer, this is a landmark statute law that would at least address some of the gross unfairnesss and instabilities in the US economic system every bit far as rewards and benefits are concerned.


This paper has discussed the proposed statute law to increase the Federal Minimum Wage for low pay earners. The predating subdivisions have examined the effects of the proposed statute law from a broad assortment of positions. The cardinal subject that has emerged is that this statute law, if passed, would turn to the job of structurally low rewards particularly for those in the lower income brackets. Sing the fact that these low pay earners have borne the brunt of the on-going recession, there are obliging economic, societal, and political grounds for go throughing the measure. Though the measure, as things stand now, has a 5 % opportunity of go throughing, it would be in the equity of things that Congress and the Senate passes this measure without hold. The success or otherwise of the transition of the measure would depend on how much support can Rep. Miller and Sen. Harkin muster for their cause.

Given the fact that the current house of representatives is giving manner to a new house in a month ‘s clip, the undertaking before Rep. Miller and Sen. Harkin, is clear. A batch would depend on how President Obama views the transition of the measure and lends his personal support. The overarching factor for the success of the measure is that it seeks to right some instabilities, as they exist in the current pay construction in the United States. in decision, the HR 6211 is a landmark statute law that would follow the celebrated stairss laid down by the House in earlier decennaries with respects to the subject of societal justness and delivering the rights of the less privileged and deprived subdivisions of society.