Peter Kingston

ENGL 2010-023
Jim Beatty
7-31-2015
The Decline in Minimum Wage

America has always had inflation. It will always be the case. It needs to happen
eventually. Its happened consistently throughout the brink of American history. Its hard to say
we know whats going to happen when we do it. The Minimum Wage is a constant controversy
in America from the Left, the Right, the Economists, the poverty Population, and the wealthy
Population. We know this is a problem and it needs to be fixed. But if the legislature does pass a
higher minimum wage, we need to know what would happen and whether or not the benefits
would outweigh the negatives. I believe the minimum wage should rise with the economy that
we need. (Kearney, Harris, 2014)
Its very important that America knows when to change their minimum wage because the
minimum wage has a different value in time as inflation goes by. According to a video from
Time magazine (2014), the minimum wage was worth the most (could buy the most) in the year
of 1968 which was equivalent to $10.75 of todays money. According to Short (2014), the
American economy could provide the minimum wage citizen with $18.42 per hour if the
productivity of 1968 continued until today.
Ever since, the 1960s, the minimum wage worth has steadily declined. With a wage of
$7.25 an hour, it ends up giving individuals $15,080 a year if theyre a full time employee. This

means no full time schooling. In order to raise one child from birth to the age of 17, it costs on
average, according to Daniel Wesley of visualeconomics.com, a total of $149,760 in 2009. These
prices have only inclined, but this is only the statistics of what it costs if there was no inflation
from the year of 2009. This amount leaves a single parent of a child with only $106,600 left from
those 17 years of full-time work. This 106k can buy 1 house with an average of 3 bedrooms and
2 bathrooms and at maximum 2 levels (main and basement).
In 1938 President Franklin Roosevelt enacted the minimum wage with the Fair Labor
Standards Act with the intentions of removing poverty in America. Many feel like the minimum
wage is used not to remove poverty, but to keep a glass ceiling to those who are, Not worthy of
a higher paycheck. (Harris, 2014) The conservative right tries to restrict and deny the growth of
minimum wage because it is said to remove experience for the desperate workers that get the
experience they need from minimum wage jobs that help them move up in the job market,
according to, Russel Huebetsch (2014). For this there is a 90 day below-minimum-wage for
those who are under the age of 20 which amounts to $4.25 and hour.
This is an interesting point, but it is only assumed because none of the congressmen
actually live below the poverty line and experience the necessary experience that they speak of.
Another argument made is that the only people who are affected by the minimum wage are those
who flip burgers and teenagers. The average minimum wage earner is 35 years (Harris, 2014).
This group of minimum wage employees consists of 35 million people. Only 12 percent of those
workers are teenagers.
It seems as if the right side really wants a controlled inflation that will only be destroyed
with the raised minimum wage. But it also seems like they want this controlled economy in their

behalf. The right side tends to be a bit wealthier, but any shake in their system seems to
aggravate the cash flow that needs to be within the lower half of the economy.
The Target Group is those affected by the line of minimum wage and the line of
poverty and the cost there-of. According to Worstall (2015), the amount of minimum wage
increased in the early 2000s was about 30%. As a result, the percentage of employment-topopulation was reduced 0.7% on a national level. This, Worstall (2015) claims, is a direct cause
of the Target group to lose their jobs from the minimum wage increase because the low wage
paying companies lose the ability to pay on a larger scale, because the law requires higher pay
for the employers.
Giving a higher paycheck to the minimum wage customers, then in turn places that
money into the smaller markets. This then gives those markets success and in turn gives more
jobs and opportunities. So, it basically puts a greater amount of cash flow in the lower part of
society and gives more opportunity to those who struggle financially.
Raising wages also makes so many people think that there wont be a greater economy
because of the cost to pay the new minimum wages. But, if the wages increase, there is more
spending in the economy, which, according to Imbert (2014), leads directly to the increase in
jobs. He says it doesnt really effect or help the lower level, minimum wage workers, it effects
the mid ranged company heads in a very positive effect. This effect is an increase in pay for the
entrepreneur level that then opens more opportunities for those who receive that minimum wage.
So, in turn it affects both sides and creates a better economy overall.
One of the greatest concerns is that when the minimum wage is raised, everything is
raised. The amount of people affected, according to Harris and Kearny (2014), would total a

devastating 35 million workers. This is 29.4% of Americas employees in the year 2014. But this
is good. This again puts a greater amount of money in the lower level cash flow system. Many
companies respond to this wage increase with a firm hand that is highly recognized by the taxes
and energy costs that are meant to build our nations economy. (Pearlstein, 2015)
In the 2000s there was a growth of 4.5% in wage and commodity prices, but the core
inflation only grew 2.5 %.(R.A. London, 2014) The amount of inflation that is predicted still
hasnt hit us. What are we waiting for? Why have we been scare of the enemy that isnt there?
The amount of money that is used by minimum wage workers is about 20% of the nations costs.
Giving that money to our greatest consumers can only promise growth in smaller businesses and
a greater market for success for the young entrepreneurs out there.
So far, there have been 29 states that have signed for an increase above $7.25 per hour.
This averages about $7.50 with the states who havent signed off their wage increase. Fellow
people of Utah, vote for a higher minimum wage so we can finally get a higher cash flow in the
lower part of the American economy.

Bibliography

Huebsch, R., 2015. Purpose of a Minimum Wage. Demand Media. Available from:
http://smallbusiness.chron.com/purpose-minimum-wage-2770.html [Accessed 2015].

Gillikin, J., 2015. Problems with Minimum Wage. SmallBusiness.Chron.Com. Available from:
http://smallbusiness.chron.com/problems-minimum-wage-2692.html [Accessed 2015].

Kearney, M.S. & Harris, B.H., 2014. The "Ripple Effect" of a Minimum Wage Increase on
American Workers. The Hamilton Project. Available from:
http://www.hamiltonproject.org/papers/the_ripple_effect_of_the_minimum_wage_on_am
erican_workers/ [Accessed 2015].
Imbert, F., 2014. Minimum wage raise will help economy: Advocate. CNBC. Available from:
http://www.cnbc.com/2014/12/31/minimum-wage-raise-will-help-economyadvocate.html [Accessed 2015].

Worstall, T., 2015. Rises in the Minimum Wage Really Do Destroy Jobs. Forbes.Com. Available
from: http://www.forbes.com/sites/timworstall/2015/01/07/rises-in-the-minimum-wagereally-do-destroy-jobs/ [Accessed 2015].

A., R., 2014. Waiting for Inflation. Economist.Com. Available from:

http://www.economist.com/blogs/freeexchange/2014/07/americas-economy-0 [Accessed
2015].

Pearlstein, S., 2015. Big strides could come from a small bump in pay. Www.Washingtonpost.Com.
Available from: http://www.washingtonpost.com/business/big-strides-could-come-from-a-smallbump-in-pay/2015/01/02/471984fe-8fa6-11e4-a412-4b735edc7175_story.html [Accessed 2015].