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Matthew Kern Karyn Pallay ENG 112-DL03 May 2,2014 We Should Raise the Minimum Wage

People have always worked for the promise in return of either goods and or services. Up until the late 1930s business could pay their employees whatever they wanted too without any regulation or interference from the government. At the time, there were not any work unions or associations to speak for the common man. Even if there had been a union for workers, there were not any work place laws to hold the employer accountable for their actions. Our government saw what was going on in our country and stepped in with a series of laws and or amendments, beginning with the National Industrial Recovery Act (NIRA) which was signed into law in 1933. This was a part of Franklin D. Roosevelts New Deal. The purpose of this act was to allow the Executive Branch to regulate industry. Along with the enacting of a minimum wage of $0.25, the New Deal also provided Unions with the power of collective bargaining. The portion of the Act imposing minimum wage was overturned in 1935 by the U.S. Supreme court in Schechter Poultry Corp v. United States; however in 1938 Under the Fair Labor Standards Act of 1938 the rate of $0.25 was once again reinstated. (Roos) Why should we even have a minimum wage? Should we raise the current minimum wage? Those are two important questions that must be evaluated. To assist

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with answers to the impending questions, two famous quotes make powerful statements, one from a famous President and the other from a comedian. When President was Franklin D. Roosevelt was lobbying for the passage of the National Industrial Act he was quoted: No business which depends for existence on paying less than living wages to its workers has any right to continue in. (Tritch) This shows that President Roosevelt believed that businesses should be required to pay a fair wage, or it should not be able to be an established business. From a more comical stand point, which is sadly true, a portion of comedian Chris Rocks Stand-Up Routine, he is quoted as saying I used to work at McDonald's making minimum wage. You know what that means when someone pays you minimum wage? You know what your boos was trying to say? "Hey if I could pay you less, I would, but it's against the law. (Parisian) The purpose of having a minimum wage is to guarantee fair pay for fair work or at the very least a starting point. This wage should be in line with several factors inflation and the gross domestic product (GDP). Sometimes the minimum wage is phrased as a living wage, meaning that if you work 40 plus hours at this rate you should be able to support at the bare minimum yourself. Without a law in place to at least guarantee this people could be paid next to nothing with no recourse and the burden would fall on the tax payers of this country. When minimum wage was enacted it was supposed to, and the key word here is supposed to, be adjusted with inflation and the cost of living. This has not always been the case, as is not adjusted frequently enough as shown in the below chart.

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The above chart is an illustration of the increase of minimum wage over the years.

In recent article in The Atlantic they asked a series of questions in regards to as should we raise the minimum wage or not. One of the questions that is very eye opening is, the question that talks about what really is minimum wage. Minimum wage is currently $7.25 an hour. In the article it talks about what you can buy with that $7.25, but with taxes it is more like $7.00-$7.15 an hour. The answer the article gave was a Chipotle Burrito without guacamole. (Weisman)
What you get for your Hard Work Minimum Wage x 40 Hours=$290.00 After Taxes=$215.00 Monthly income-$860.00 Avg. Cost of 1 Bedroom Apt=$875.00 Avg. Cost of Food for 1=$200.00 Avg. Cost for Utilities=$225.00 Insurance/Misc.=$150.00 +/- = -$590.00
The above chart uses averages obtained from local sources in the Central Virginia Area

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As you can see from the chart above, that unless a minimum wage worker were to pick up a second job, they may find themselves in a financial world of hurt rather quickly. People who live solely off of minimum wage usually fall under the poverty line. What compounds this to an even more freighting reality is that in many cases people look to credit cards and or payday loans to fill the gap, but in reality they are just digging the hole deeper. The situation quickly turns to credit cards to pay other credit cards, and more loans to pay loans. This brings the worker more and more into debt, and eventually ruining their credit entirely, and even the possibility of bankruptcy. This affects the economy as a whole, making credit harder to get, and interest price go up. This is something that the opponents of increasing the minimum wage fail to disclose, where do these people fill the void? When companies like Walmart employee people and pay them $7.25 an hour where do these people turn for assistance? They go right to the federal government for subsidies in the form of food stamps, so instead of the employers paying for the workers to make a living, the government, which in turn makes it the tax payers of America that are making up the gap that minimum wage leaves. As the minimum wage goes up, the number of people on public assistance also drops. (Jamieson) Often people think of the average minimum wage worker as teenager, picking up a second job after school, or for the summer. This is not the reality. Of the millions of workers who make minimum wage 88% are older than 20, over of them work full time, 28% have children. Also over 40% have at least some college education. These are adults working to support themselves and their family, not just kids looking for extra spending money. (Cooper, and Essrow)

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Opponents, who are primarily corporations, of increasing the minimum wage fear that by costing businesses more money for employees, they will see an increase of employers reducing jobs. Which they fear, would increase unemployment. If businesses did not lay off its employees, then the alternative would be to pass the increase on to the customers, causing the price of good to go up in an already struggling economy. For the first part of this argument business that pay minimum wage, such as fast food restaurants, would struggle to run the business if they just decreased their work force. It would not be feasible to just suddenly decide they could run the business without a cook or a cashier. As far as the prices of goods going increasing, research suggest that this most likely will not happen to the extreme measures we are lead to believe by opponents of raising the minimum wage. Research shows prices may increase 4%. (Weismann) To put numbers to this, a hamburger costing $3.00 would increase to $3.12. While this is not without cost to the consumer, paying the gap for minimum wage as a tax payer is not without cost either. Increasing the minimum wage would be beneficial to America as a whole. We would see a reduction of the number of people who are at the poverty level. Public assistance benefits would decrease. The whole purpose for the invention of minimum wage was to guarantee the American worker enough money to meet the minimum needs to support their family. It is not currently doing that. We must get back to making the minimum wage truly, that a minimum wage and not the poverty wage.

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Works Cited
"U.S. Department of Labor -- History -- Fair Labor Standards Act of 1938:." U.S. Department of Labor -- History -- Fair Labor Standards Act of 1938:. N.p., n.d. Web. 1 May 2014. <http://www.dol.gov/dol/aboutdol/history/flsa1938.htm>. Cooper, David, and Dan Essrow. "Low-wage Workers Are Older Than You Think: 88 Percent of Workers Who Would Benefit From a Higher Minimum Wage Are Older Than 20, One Third Are Over 40." Economic Policy Institute. Economic Policy Institute, 28 Aug. 2013. Web. 1 May 2014. <http://www.epi.org/publication/wage-workers-older-88-percent-workers-benefit/>. Jamieson, Dave. "Minimum Wage Raise Would Reduce Food Stamp Spending By $46 Billion Over Decade: Report." The Huffington Post. TheHuffingtonPost.com, 5 Mar. 2014. Web. 1 May 2014. <http://www.huffingtonpost.com/2014/03/05/minimum-wageraise_n_4904516.html>. Parisian, Elizabeth. "Some Employers and Republicans Want to Lower the Minimum Wage -- Here's Why They're Completely Out of Touch." The Huffington Post. TheHuffingtonPost.com, 21 June 2012. Web. 1 May 2014. <http://www.huffingtonpost.com/elizabeth-parisian/how-low-can-they-go-some_b_1613969.html>. Roos, Dave . "How Minimum Wage Works." . N.p., 1 Jan. 2009. Web. 1 Jan. 2014. <Roos, David. "HowStuffWorks "How Minimum Wage Works"." HowStuffWorks. N.p., 1 Jan. 2009. Web. 1 May 2014 Tritch, Teresa. "F.D.R. Makes the Case for the Minimum Wage." Taking Note - The Editorial Page Blog - NYTimes.com - NYTimes.com. N.p., 1 Jan. 2014. Web. 2 May 2014. <http://takingnote.blogs.nytimes.com/2014/03/07/f-d-r-makes-the-case-for-the-minimumwage/?_php=true&_type=blogs&_r=0>.

Kern 7 Weissmann, Jordan. "Should We Raise the Minimum Wage? 11 Questions and Answers." The Atlantic. Atlantic Media Company, 16 Dec. 2013. Web. 1 May 2014. <http://www.theatlantic.com/business/archive/2013/12/should-we-raise-the-minimum-wage-11questions-and-answers/282326/>.