Wednesday, August 28, 2013
Tweet[IWS] CRS: THE FEDERAL MINIMUM WAGE: IN BRIEF [30 May 2013]
IWS Documented News Service
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Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
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Congressional Research Service (CRS)
The Federal Minimum Wage: In Brief
David H. Bradley, Specialist in Labor Economics
May 30, 2013
http://www.fas.org/sgp/crs/misc/R43089.pdf
[full-text, 11 pages]
Summary
The Fair Labor Standards Act (FLSA), enacted in 1938, is the federal legislation that establishes
the minimum hourly wage that must be paid to all covered workers. The minimum wage
provisions of the FLSA have been amended numerous times since 1938, typically for the purpose
of expanding coverage or raising the wage rate. Since its establishment, the minimum wage rate
has been raised 22 separate times. The most recent change was enacted in 2007 (P.L. 110-28),
which increased the minimum wage to its current level of $7.25 per hour.
In addition to setting the federal minimum wage rate, the FLSA provides for several exemptions
and subminimum wage categories for certain classes of workers and types of work. Even with
these exemptions, the FLSA minimum wage provisions still cover the vast majority of the
workforce. Despite this broad coverage, however, the minimum wage directly affects a relatively
small portion of the workforce. Currently, there are approximately 3.6 million workers, or 4.7%
of all hourly paid workers, whose wages are at or below the federal minimum wage of $7.25 per
hour. Approximately three-quarters of minimum wage workers are age 20 or older and nearly
two-thirds work part time.
Proponents of increasing the federal minimum wage argue that it may increase earnings for lower
income workers, lead to reduced turnover, and increase aggregate demand by providing greater
purchasing power for workers receiving a pay increase. Opponents of increasing the federal
minimum wage argue that it may result in reduced employment or reduced hours, lead to a
general price increase, and reduce profits of firms paying a higher minimum wage.
Contents
The Federal Minimum Wage ........................................................................................................... 1
FLSA Minimum Wage Coverage ..................................................................................................... 1
Enterprise Coverage .................................................................................................................. 1
Individual Coverage .................................................................................................................. 2
Exemptions and Subminimum Wages ....................................................................................... 2
Excluded from FLSA Minimum Wage Coverage ............................................................... 2
Subminimum Wages ............................................................................................................ 3
Characteristics of Minimum Wage Workers .................................................................................... 4
State Minimum Wages ..................................................................................................................... 5
Arguments For and Against Raising the Minimum Wage ............................................................... 5
Arguments For Increasing the Minimum Wage......................................................................... 6
Increases Earnings ............................................................................................................... 6
Increases Aggregate Demand .............................................................................................. 6
Reduces Inequality .............................................................................................................. 6
Reduces Employee Turnover .............................................................................................. 7
Arguments Against Increasing the Minimum Wage .................................................................. 7
Reduces Employment .......................................................................................................... 7
Does Not Reduce Poverty ................................................................................................... 7
Increases Prices ................................................................................................................... 7
Reduces Profits .................................................................................................................... 7
Contacts
Author Contact Information............................................................................................................. 8
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