Assignment 1 Price Controls The Minimum Wage

Analyze costs and benefits to an economy of a minimum wage law (your paper must identify at least one (1) cost and one (1) benefit of such laws). Craft a short 1-2 paragraph argument in support of minimum wage laws or against the use of minimum wage laws to improve standards of living based on your analysisThe Fair Labor Standards Act of 1938 established the first federal minimum wage of 25 cents per hour for workers in designated industries. By 1981, the minimum had increased to $3.35 per hour. For the remainder of the decade, however, the minimum remained unchanged. Given a rising general level of prices since that time those earning the minimum found that while their wage remained constant, their purchasing power was eroding. This situation eventually led to an increase in the minimum to its current level of $5.15 per hour in 1997. It would be another decade before Congress and the President agreed to another increase. In the spring of 2007, agreement was reached on a three-step increase in the federal minimum wage. The first step increased the minimum to $5.85 in the summer of 2007. The minimum then rose to $6.55 in the