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The Minimum Wage Debate: where do you stand?

money The Minimum Wage Debate: where do you stand?Pay has become a hot topic in our nation this year as overtime and minimum wage debates surge. With Los Angeles becoming the largest city to set a $15 minimum wage last week, many wonder what other changes are in store for 2015.

The federal minimum wage has not been raised from $7.25 since 2009 and grassroots campaigns are now pressuring lawmakers to follow in the footsteps of cities like Los Angeles. The history of the minimum wage debate reveals an interesting past to better one’s perspective on the situation.

In 1938, President Franklin D. Roosevelt established a $0.25 minimum wage through what is referred to as the Fair Labor Standards Act (FLSA). Roosevelt explained the FLSA to Americans through one of his famous fireside chats, calling it “the most far-reaching, farsighted program for the benefit of workers.” The FLSA provided more than just a minimum wage to American workers; it also ensured many of the essential facets that we take for granted today. Overtime pay, record-keeping requirements and even child labor provisions to prevent children younger than 16 from performing hazardous duties were all created through the adaptation of the FLSA.

Despite Roosevelt’s confidence in the FLSA at this point in time, the minimum wage would require raising 22 times to adjust for inflation. The minimum wage does not automatically increase to keep up with inflation. Each time minimum wage became insufficient, the president at that time would work out a reasonable increase as needed. However, the war between Republicans and Democrats in Congress and around the country has put the issue into stalemate.

The majority of Democrats have sided with labor unions in the minimum wage debate, roughly stating that an increase in minimum wage would decrease poverty and income inequality and even boost the American economy. The opposition is made up of the majority of Republicans and business owners, who claim that the rapid increase of the minimum wage would not only lead to layoffs and reduced hours for low-income employees, but may even put some companies out of business for good.

Warren Buffet has opted to take another approach to the minimum wage debate. Instead of a drastic change to minimum wage, he suggests expanding the earned income tax credit to those living on a low income. Although the idea has gained some positive traction, skeptical lawmakers have yet to agree where exactly that money could come from.

In the meantime, states, cities and several large corporations, including Wal-Mart and Gap, have made adjustments to their minimum wage to better the lives of their minimum wage workers. Only time will tell what the future holds for the minimum wage debate and the impact it will have on our country.

Source: Yahoo!, U.S. Department of Labor