Is minimum wage good?

Great Answer

Professionally Researched. (What's this?)

On One Hand: Minimum Wage was Created to Protect Workers

Minimum wage is set by the federal and state governments to insure that workers are being paid fairly. When the Fair Labor Standards Act of 1938 was signed into law, the minimum wage was 25 cents an hour. The wage has increased periodically over the years when Congress passes a bill and the president signs it. As of 2010, the federal minimum wage was $7.25 an hour.

On the Other: Minimum Wage Hurts Employers

Minimum wage is viewed as the reason why many companies are cutting jobs or moving toward automation to cut their labor costs. Experts say it stunts the growth of small businesses and discourages the creation of new jobs. However no study has concluded that to be the case. Instead according to a study by the Fiscal Policy Institute, employment, small business creation and wages grew after the 1996 wage increase, which was heavily criticized.

Bottom Line

Minimum wage helps workers earn a better living than what they would if the law wasn't in place. However minimum wage earners made less in 2009 ($15,080) than the poverty threshold for a family of three ($17,285).

Source:

U.S. Department of Health & Human Services: The Low-Wage Labor Market

U.S. Census Bureau: Poverty

More Information:

Economic Policy Institute: Minimum Wage and Its Effects on Small Business

U.S. Department of Labor: Minimum Wage

More Questions. Additional questions in this category.

ANSWERBAG BUZZ

Why was sarbanes oxley created