GOVERNMENT ROLE ON MINIMUM WAGE

Government role on minimum wage

Introduction

In past years, the Democrat-led Congress and White House enacted legislation raising the minimum wage law, in steps, from $5.15 an hour to $7.25. With some modification, the increases applied to the Pacific Ocean territories. Republicans and others opposed to the increases and were labeled as hostile toward workers. According to most opinion polls taken in 2006, more than 80 percent of Americans favored Congress' intention to raise the minimum wage. Most Americans see the minimum wage as a good thing, and without it, rapacious employers wouldn't pay workers much of anything. In England, the status of artisans of 1563 brought under statutes of forced labor and fixed the maximum wage scales. To counter the shortage of labor prevailing wage, American colonies were increased in the 17th century which has created a salary cap and minimum hours of employment.

The decay which is now the minimum wage, which imperfectly protect those who benefit, is one facet of the collapse of the social compact that has worked throughout the war boom and has then shattered. Statistics on the labor market in the U.S. says that 95% of employees throughout their career never ask their company for a pay rise. This critical condition raises a question for U.S government that “should a maximum wage law be put in place in the united states”

Discussion

Wage determination refers to the market process that establishes the amount a firm pays a worker for a unit of time. A market exists when there is demand for and supply of a product. In the case of the labor market, firms demand individuals' time as an input for production, and workers supply it. The nature of the labor market, including the number of firms and special qualities of workers, influences the wage determination process. Other social institutions such as the government and interactions between individuals, including those characterized by racism and sexism, also influence payments made to workers (Waltman, 2010)

The maximum wage was imposed by some social democratic governments like Sweden in the 60s. However, the policy has been criticized and the militants later had a "tax revolt" and demanded the government reduce the top marginal tax. In a campaign of Green Party presidential nomination, Jello Biafra advocated implementation of a maximum wage in the United States. Biafra has claimed that is would increase taxes for the rich and reduce taxes for those in lower and middle classes.

Since the passage of the Fair Labor Standards Act in 1938, the U.S. Congress has set minimum rates of pay for workers in specific industries and occupations. Proponents of minimum wage statutes argue that some jobs are beneath the dignity of American workers. According to this view, even if raising wages reduces demand for workers and unemployment rises, losing those jobs is appropriate because Americans should not work for such low pay. Others have argued that imposing minimum wage standards are inconsequential because this legislation has no adverse affects on ...