22 Pages Posted: 19 Mar 2010
Date Written: March 15, 2010
The purpose of this article is to evaluate the effect of the newly increased minimum wage, as per the Fair Labor Standards Act, on the unemployment rate. While Congress executed the Act to help lower class workers, they executed it negligently in a recession that has been intense and ongoing. Now many of these lower class workers are unemployed. An extensive study of unemployment rates since the increase was completed to compare the rates prior to the increase and also amongst the different classes of workers. Case law relating to enforcing minimum wages is also discussed to demonstrate how employers will try to escape the Fair Labor Standards Act requirements in order to keep their businesses going.
The result of this research yields that Congress’s act negatively impacted the labor force. Instead of helping the lower class worker, it took those little wages that they were desperately depending on. In conclusion, the government did not think comprehensively before enforcing the act and now employers, taxpayers, and the working poor all have to pay for this negligence. Congress legally robbed Peter to pay Paul by increasing minimum wages during a suffering economy and leaving many lower class workers unemployed.
Keywords: minimum wage, government, Fair Labor Standards Act, increase, unemployment, labor force, working poor, unemployed, congress
JEL Classification: J00, J15, J17, J18, J19, J10 ,J21, J20, J23, J30, J31, J32, J60, J63, J64, J65, K00, K19, K31
Suggested Citation: Suggested Citation
Jyles, Ashley, The Newly Increased Minimum Wage: Congress’s Way of Robbing Peter to Pay Paul (March 15, 2010). Available at SSRN: https://ssrn.com/abstract=1572057 or http://dx.doi.org/10.2139/ssrn.1572057