Minimum And Livable Wage Term Paper - 3050 Words

MINIMUM AND LIVABLE WAGE TERM PAPER 1 Minimum and Livable Wage Term Paper Ben Berlin Xiaotong Huang Nikki Iloka Santos Rugel Loyola University - Compensation 413 Historical Overview Since its inception, minimum wage has been a controversial topic among economists. The United States passed the Fair Labor Standards Act (FLSA), a federal minimum wage law, in 1938 and has increased its wages and who it covers at sporadic intervals. Minimum wage can be defined as the smallest amount of compensation an employee receives for performing labor (depending on the industry). Since the federal government decided a minimum wage, it is illegal and a labor crime to pay any employee less than the federal minimum wage (Neumark and Wascher,†¦show more content†¦Roosevelt endorsed a series of economic programs called the New Deal. Before the FLSA came along, the National Industrial Recovery Act (NIRA) was the most important statute to help the U.S. recover from the Great Depression. The NIRA provided many provisions for the later statutes and the FLSA of 1938 is the one law that provides for a federal minimum wage (Congressional Digest, 2013). According to the FLSA, the coverage of the minimum wage is divided into enterprise coverage and individual coverage. At the company level, the organization must have more than two employees and more than $500,000 in annual profits. At the individual level, if the organization does not have more than $500,000 annual profits, employees will still be covered if they are individually engaged in interstate commerce. Interstate commerce means that the individual must have products that can be shipped out of the original state, in order to create more jobs and stimulate more than just the local economy (promoting trade) (Bradley, 2013). Throughout this paper we will delve into the history of minimum wage policies within the United States, explore its positive and negative side effects, and take a unique perspective on how heightened unemployment rates can be directly tied to raises in the minimum wage. Minimum Wage Policy The United States has a plethora of labor laws in place to help clarify the rights of workers, employers, and even labor unions. Federal