The Economic Effects Of Raising The Minimum Wage Essay

1260 Words Apr 22nd, 2016 6 Pages
The Economic Effects of Raising the Minimum Wage According to the United States Department of Labor, on June 25, 1938, the Fair Labor Standards Act was signed by President Franklin D. Roosevelt, setting the federal minimum wage to twenty-five cents per hour. Since then, the federal minimum wage has increased twenty-eight times, and currently sits at seven dollars and twenty-five cents per hour. Despite these raises, the general public shows dissatisfaction with the current wage, and the discussion about whether or not to raise it has surfaced again. Some even argue for doubling the current rate. Although raising the federal minimum wage may create temporary economic stimulation, the long-term results would limit upward mobility, shut teenagers out of the workforce, have a small or even negative impact on the overall economy, and cause major employee labor cuts. Raising the minimum wage can actually decrease future earnings for those who need the boost in finances the most. In his article, Labor Market Institutions and Economic Mobility, Seth Zimmerman states that “each 10 percent increase in the minimum wage a 25- to 29-year-old experienced between the ages of 20 and 24 decreases his or her expected current earnings by 3.8 percent.” He goes on to discuss the benefits of raising the minimum wage for “a number of people who remain stuck at low levels, however decreases in overall employment [...] may offset these gains for some groups” (Zimmerman, 2). This is an…

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