In of poverty. However, at the same time,

In the year 1938, the Fair Labor Standards Act was signed by President Roosevelt. The FLSA included the establishment of a minimum wage of 25 cents an hour.

The minimum wage was established to help the working poor, but does it really help the lower class? In the short term, the minimum wage helps the poor because they are certain to receive more then they would have without this law. However, in the long term, the reality remains that companies and businesses are only around to earn as much money as they can, so if a companies budget is effected due a forced increase in wages, they are almost certainly going to have to make cuts, which means less people will be employed.The minimum wage, practically speaking, helps the hired employees make more money, but denies the fired or unhired jobs. According to a report from the congressional budget office in 2014, a raise in minimum wage would lift almost one million americans out of poverty. However, at the same time, Employers would be likely to pass on that expense to consumers, which effectively causes the demand to slow down, which in turn causes less earnings for companies. The byproduct of this is less demand for employees. While raising the minimum wage would almost certainly ensure that less people will be hired.

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Those that are employed at the minimum wage would likely have their hours reduced as well, leading to a lower earned income. According to the pew research center, out of the 2.6 million Americans working for minimum wage, approximately 50% of employees are between the ages of 16 to 24. Raising the minimum wage would cause businesses to be less likely to spend their resources on younger, unskilled employees.

An example of this is, big stores such as walmart, target, home depot, and many many more have turned to technology instead of cashiers, self-service checkout is a growing market, partially due to the increasing minimum wage,According to a 2013 article by the federal reserve bank of chicago, if the minimum wage is increased, fast food chains would pass 100% of the extra labor expense on to its customers. 8 out of 10 americans eat fast food at least once a month, so, an increase in wages is also an increase in cost of living for a huge amount of the population. An increased living cost can very well undo any benefits that the minimum wage might bring. Minimum wage was established by the federal government, however, the federal government does not control the hiring and firing of employees. As Per Bylund, PhD, a research professor at Baylor university puts it, the federal minimum wage “disrupts the balance of the market and prohibits the creation of new jobs.” which means, businesses should be able to pay wages based on the value of labor that the employee brings and not by a set wage.

The minimum wage may bring temporary relief to the poverty stricken. However, if we want to eradicate poverty from the United States, our efforts should be focused elsewhere. Education is essential to raising the poor out of their poverty, ensuring that every child recieves a proper education will very likely level the playing field between impoverished communities and those that are well to do. The minimum wage was a phenomenol idea, nevertheless, we are able to, and we must, do more for those in need rather than ensuring they make set wages. Khimm, S.

(2014, February 19). CBO: Raising the minimum wage helps the poor but reduces jobs. Retrieved from of minimum wage workers, 2015 : BLS Reports. (2016, April 01). Retrieved from https://www. Aaronson and Eric French, “How Does a Federal Minimum Wage Hike Affect Aggregate Household Spending?,” Chicago Fed Letter, Aug. 2013 Per Bylund, “Raising the National Minimum Wage Would Destroy the Job Market,” Library of Law and Liberty website, June 22, 2015


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