1. Wilkes University
THE ANALYSIS OF THE FEDERAL MINIMUM WAGE
Kenneth Moules
MBA 592
Dr. Jennifer Edmonds
May 1, 2016

2. INTRODUCTION
When looking at the overall makeup of our country, one of the more important aspects in
terms of its success is the overall economy. Dependent upon its successes or failures, the
economy seeps into many aspects of our lives. Although many believe the economy’s strength
or weakness affects the richest in our society the most, a much truer statement would be to the
contrary. The most dependent, and most important, members of our society in relation to the
economy are the less fortunate. Those who work paycheck to paycheck performing the most
basic needs of our economy and society are the backbone for the entire economic structure in
America. It is also those same people who are taken for granted the most. Whether it is
economic policy, or an overall discussion of how strong our economy truly is, these people
working for low wages are routinely left out in the cold. This is why I have chosen a particular
topic that may help shine a light on a very important issue in today’s economy. This project will
be devoted to doing a fundamental analysis of the federal minimum wage and everything that
goes along with it.
Before moving forward, I have a simple request of you the reader. I ask of you to wear
two hats per say when reading this project analysis. To get a true understanding of what should
be done in regards to minimum wage in the future, we all have to take into consideration two
completely different groups of people. The first are the many workers, in factories and fast food
restaurants around the country, who need this issue to be at the forefront of our national
discussion. Their wages are so important to providing an adequate life for themselves and their
families. The second group is those in Washington D.C., or state capitals around the country.
We also need to take into consideration that these men and women n political offices across the
country have decisions to be made for the good of all its citizens, not just those who make a
minimum wage hourly rate. If we can make sure both of these parties I just listed are
represented in our discussion and thoughts on the issue, I feel this project will be beneficial to
our overall analysis of the federal minimum wage.
Before getting too much into my overall project, it is important to have a true
understanding of the federal minimum wage and what it is. The federal minimum wage is
ground floor per say of wages allowed by law to be earned in the United States. “The Fair Labor
Standards Act (FLSA) affects most private and public employment. The FLSA requires
employers to pay covered non-exempt employees at least the federal minimum wage and
overtime pay for all hours worked over 40 in a work week. Covered employees must be paid for
all hours worked in a workweek. In general, compensable hours worked include all time an
employee is on duty or at a prescribed place of work and any time that an employee is suffered
or permitted to work. This would generally include work performed at home, travel time,
waiting time, training, and probationary periods” (Department of Labor, 2012). This law also
protects employees who are paid by tips guaranteeing them $2.13 an hour and forcing the
employer to make up the difference if their full pay does not meet the minimum requirements
(Department of Labor, 2012). Any employee working overtime is also guaranteed to be paid 1 ½
times their base hourly rate for any hours worked past the forty hour per week threshold
(Department of Labor, 2012). In terms of the current federal minimum wage, the rate stands at
$7.25 and has not been raised since 2009 where it then stood at $6.55 (Economic Policy Institute,
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3. 2016). An important thing to keep in mind is that the ending minimum wage for employers is
dependent on state laws as well, and I will dive further into this later in the project. However, no
matter what, and qualifying employee as listed by the parameters above can’t earn a wage less
than $7.25.
Two other important points to establish are any employee rights under the current laws
and what power Congress has over the issue to enact change. Workers are protected as long as
they fit the criteria of the FLSA and feel as though their right to a minimum wage has been
hampered by their employer. Their rights are rather extensive, and employers can face harsh
penalties for lack of pay and repeated inaction. “Damages for employees for violations can be
significant. The FLSA affords a private right of action for employees to recover unpaid
minimum wages. In fact, an employee may bring a claim on the employee's own behalf and on
behalf of any “similarly situated” employees. The FLSA has both civil and criminal
components. FLSA provides for criminal penalties and fines of up to $11,000 for willful
violations of the statute. Furthermore, an individual can be held personally liable for civil
damages, if she effectively controls an employer and/or serve as an alter ego of it. The civil
remedies can include all unpaid compensation, mandatory liquidated damages equal to the
amount of the unpaid compensation, reinstatement, and attorneys' fees” (Cornell University Law
School, 2016). In terms of the government, the legislative branch since the FLSA has garnered
the most power in terms of enacting laws that affect the federal minimum wage. However, the
FLSA and Congress have granted the Secretary of Labor and his/her department authority to go
after employers in violation of standing law. “FLSA authorizes the Secretary of Labor to use
several different methods to evaluate an employer's conduct and enforce the minimum wage
requirement. Congress created the Wage and Hour Division in the Labor Department to allow
the Wage-Hour Administrator and the Secretary to investigate and detect violations. The Wage
and Hour Division can compel the attendance of witnesses at hearings. It may also require an
employer to make records available to the Wage-Hour Administrator. Additionally, the
Secretary can sue to restrain violations and to some extent recover unpaid benefits on behalf of
employees” (Cornell University Law School, 2016).
HISTORY OF THE FEDERAL MINIMUM WAGE
The first major part of my research focused on the history of the federal minimum wage
and where the law originally enacted. Who, when, and where are instrumental aspects of
understanding why the law was enacted and why certain amendments were made to further
protect employees and their families. I will also show through two major court cases the ever-
reaching affects of the judicial system on this issue. Lastly, this section will end with a look at
key statistics over time and by region dating back many years ago and ending with our present
structure.
Origins of the Wage/Law
When looking at the federal minimum wage, the first place we must start is at the
beginning of the timeline. The law as we know it today originated in 1938 from a piece of
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4. legislation known as the Fair Labor Standards Act (Gale Encyclopedia, 1999). Although this
piece of legislation had many different parts to it, the major pieces were the setting of a ground
floor for wages, the elimination of child labor, and the setting of expectations for what an
employee is and what type of work would be covered by the new laws (Gale Encyclopedia,
1999). “The Fair Labor Standards Act of 1938 (FLSA) originated in President Franklin
Roosevelt's (1933–1945) New Deal. It was a landmark piece of legislation that had a significant
impact on the labor movement in the United States. The FLSA set nationwide standards for
employees of organizations engaged in interstate commerce, operations of a certain size, and
public agencies. Still active today, it affects millions of full and part time workers in the private
sector and the federal, state, and local governments. Under the Fair Labor Standards Act, the
first minimum wage (25 cents per hour) was established. The work week was limited to 44
hours per week, which was revised in 1940 to 40 hours per week. Standards were developed to
keep records of hours worked and wages paid. These same standards allowed employers to keep
track of overtime owed to employees who exceeded the standard work week. Perhaps most
significantly, the Fair Labor Standards Act banned child labor. Children under age fourteen were
no longer legally allowed to work. Exceptions were made for the agricultural industry and some
family businesses. Children under age eighteen were restricted from "hazardous" jobs, including
mining and some factory jobs. The ban on child labor greatly decreased the number of children
harmed by bad working conditions” (Gale Encyclopedia, 1999). This law is perhaps one of the
more important in our country’s history, and certainly when it comes to the federal minimum
wage. Every piece of legislation that would come in the years to follow would be based off of
President Roosevelt’s legislation.
The other major part of this legislation is the framework for what an employee is and who
would be protected under this legislation. For the first time in American history, the term
“employee” had been clearly established covering all types of work and levels of employment.
In the above section, we established who is covered by the current laws. Employees who are
financially dependent upon the employer are always covered. An even more useful tool is to
look at who isn’t covered, or which employees are employers not responsible for paying the
federal minimum wage to. The groups of workers NOT covered by the current laws are (Nolo,
2016):
 independent contractors (only employees are entitled to the minimum wage)
 outside salespeople (a salesperson who works a route, for example)
 workers on small farms
 switchboard operators employed by phone companies with no more than 750 stations
 employees of seasonal amusement or recreational businesses
 employees of local newspapers having a circulation of less than 4,000
 newspaper deliverers
 apprentices, students, and learners, as defined by federal law.
All of the above employee groups do not have protection under the FLSA in regard to minimum
wage requirements.
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5. After introducing the FLSA, I feel it is important to look at some of the major amendments
made to the legislation from 1938-present. I picked four pieces of legislation that I feel have
made a significant impact on the FLSA since its inception. The first is the Portal-To-Portal Act
of 1947. This Act was instrumental because it was the first amendment to establish time at work
not applicable to the minimum wage, and also established the first known defense or argument
that employers can make who may be accused of violating the FLSA (Practical Law, 2016).
This act established that time spent by the employee traveling to or from work was not
compensable time, along with any incidental activities before or after work was not covered by
the FLSA (Practical Law, 2016). However, the truly groundbreaking part of this legislation was
the defense established for violators of the minimum wage laws. This was accomplished with
three parts of the 1947 amendment. The amendment contained the following three passages
(Practical Law, 2016):
 A statute of limitations of two years for violations of the FLSA and three years for willful
violations.
 An absolute defense to noncompliance with FLSA minimum wage and overtime
requirements where the employer can prove that the complained of conduct was in good
faith and in reliance on Department of Labor rules or regulations.
 A discretionary defense to claims for liquidated damages where the employer can prove
that the complained of conduct was in good faith and that it reasonably believed that its
conduct did not violate the FLSA.
The next piece of legislation that had a great impact on the relationship between
employees and employers was the Equal Pay Act of 1963. This was the first legislation that
established equal pay for employees regardless of gender (USEEOC, 2016). What is also
groundbreaking about this amendment is that it begins to spell out many of the penalties that
could be incurred by employers who fail to follow through on this promise. For example, fines
and imprisonment along with restitution to the victim(s) are all spelled out in the last section of
the bill (USEEOC, 2016). This would also lay the groundwork for a very similar piece of
legislation to follow four years later.
In 1967, the subsequent and following piece of legislation was passed. It was titled, Age
Discrimination in Employment Act of 1967. This amendment to the FLSA built off of the 1963
piece on equal pay, but this time went beyond the parameters of simply gender. It was designed
to protect those employees who are older and may be vulnerable to employers being predatory
with their employment due to their age. “The Age Discrimination in Employment Act of 1967
(ADEA) protects individuals who are 40 years of age or older from employment discrimination
based on age. The ADEA’s protections apply to both employees and job applicants. Under the
ADEA, it is unlawful to discriminate against a person because of his/her age with respect to any
term, condition or privilege of employment, including hiring, firing, promotion, layoff,
compensation, benefits, job assignments and training. It is also unlawful to retaliate against an
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6. individual for opposing employment practices that discriminate based on age or for filing an age
discrimination charge, testifying or participating in any way in an investigation, proceeding or
litigation under the ADEA. The ADEA applies to employers with 20 or more employees,
including state and local governments. It also applies to employment agencies and labor
organizations, as well as to the federal government” (Society for Human Resource Management,
2016). We now have two major pieces of legislation in a four year period which clearly detailed
two groups protected from unfair pay practices in the workplace.
Fast-forwarding forty years, the last amendment to the FLSA I wanted to touch on was
the Fair Minimum Wage Act of 2007. The reason I chose this was due to the fact it was the first
major legislation on the minimum in such a substantial time period, along with the fact it was the
first minimum wage hike in nearly ten years (Zappone, 2007). “The act, introduced by
Congressman George Miller (D.-Calif.), passed by a vote of 315 to 116 after a day of spirited
debate. The last time the minimum wage was raised was 1997. Miller, on the House floor,
called it a historic vote that had waited 10 years. He said it was simply "an up-or-down vote
saying whether the poorest people working in the country deserve a raise” (Zappone, 2007). The
bill was very popular receiving 315 votes in the U.S. House of Representatives (Zappone, 2007).
It provided an incremental hike in the minimum wage for the poorest workers in America. It
called for the minimum wage to be raised from $5.15 to $7.25 in three different periods over a
twenty six month period (Zappone, 2007). The bill was not without opposition, as many
Republicans argued on behalf of small businesses who may be forced to reduce worker hours, or
even cut overall jobs to make up for the bottom-line difference (Zappone, 2007). This would be
the last major piece of legislation in regards to minimum wage to pass through Congress. The
federal wage is still at $7.25 and no new legislation seems poised to make its way onto the floor
anytime soon.
Important Court Cases
Outside of major pieces of congressional legislation, another framework of our
government has had a profound impact on the federal minimum wage issue. That aspect is the
judicial system. Court cases on both the circuit and supreme levels can really shape future
battles on the issue and provide important precedent for future generations. Two court cases I
will look to analyze are Adkins vs. Children’s Hospital in 1923 and West Coast Hotel Company
vs. Parrish in 1937. The Adkins vs. Children’s Hospital case went all the way to the Supreme
Court of the United States. The case revolved around the District of Columbia’s 1918 legislation
where they established a minimum wage for women and child laborers (McBride, 2006). The
law laid out a minimum of $16.50 to be paid to these types of workers over a week span to help
them cover basic living needs (McBride, 2006). “In a 5-3 decision written by Justice George
Sutherland, the Court struck down the minimum wage law as unconstitutional, arguing that it
violated the Due Process Clause of the Constitution's Fifth Amendment. The Court cited
Lochner v. New York (1905) in maintaining that the clause gives citizens equal rights "to obtain
from each other the best terms they can as the result of private bargaining." According to Justice
Sutherland, the D. C. minimum wage law, by contrast, was "an arbitrary interference with the
liberty of contract which no government can legally justify in a free land." The law was
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7. especially "arbitrary," argued the Court, because it imposed uniform minimum wages on all
women regardless of their individual needs or occupations”. The Court also took issue with the
provisions of the law which gave special protection to women over men. The Court claimed that,
as of 1923, the civil inferiority of women in American society was at a "vanishing point," citing
the recent passage of the Nineteenth Amendment, which extended the right to vote to women, as
an example of their newfound equality in American culture. Special workplace protections for
women were thus unnecessary because women could protect their own interests through the
political process and equal bargaining power (McBride, 2006). This was a groundbreaking case
that reinforced the Lochner vs. New York 1905 decision, along with outlawing the pay for
women being specialized outside of that received by men. This case would also set up future
cases that would eventually lead to the formation of the FLSA in 1938.
The second case I wanted to look at was the West Coast Hotel Company vs. Parrish in
1937. This was instrumental in changing the precedent set by the Adkins case, and establishing a
new framework Congress could maneuver in. “In the case the West Coast Hotel Company
challenged the constitutionality of the state of Washington's minimum wage law for women.
Elsie Parrish, a hotel chambermaid, had filed a lawsuit seeking to recover the difference between
the wages paid her and the minimum wage prescribed by law. The hotel company argued that
the wage law violated the due process clause of the fourteenth amendment. The Washington
Supreme Court upheld the law, and the company appealed to the U.S. Supreme Court” (West’s
Encyclopedia of American Law, 2005). Many assumed that the Supreme Court would not differ
from previous rulings where it failed to draw a difference between genders in terms of wage
protection. The ruling however was very surprising. “However, in Parrish v. WCHC, the Court,
on a 5–4 vote, rejected the freedom of contract doctrine. Chief Justice Charles Evans Hughes
noted that the Constitution does not refer to freedom of contract. Rather, it proscribes
deprivation of liberty without due process of law. Hughes pointed out that freedom is not
absolute. Moreover, "the liberty safeguarded is liberty in a social organization which requires the
protection of law against the evils which menace the health, safety, morals, and welfare of the
people." Thus, constitutional liberty is "necessarily subject to restraints of due process" as long
as government regulation is reasonable and furthers the interests of the community. He branded
the Adkins decision as "a departure from the true application of the principles governing the
regulation by the state of the relation of employer and employed." (West’s Encyclopedia of
American Law, 2005). This single piece of judicial action would lay the groundwork for the
FLSA of 1938 to take shape. Now lawmakers had judicial precedent to fall back on for passing
minimum wage legislation.
Summary of the Past – Trends and Statistics over Time
When it comes to this topic, a very useful tool can be to look at trends and statistics over
time. This helps us establish a time frame for actions and also helps us look back at historical
levels and the progression they have made. One thing that makes this difficult is that statistics,
outside of the actual wage level itself, are tough to find from many years back. Not as much
research was done at that time when compared to today. However, a common theme is that
people who are at or below the federal minimum wage are (Desilver, 2014):
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8.  Disproportionately young: 50.4% are ages 16 to 24; 24% are teenagers (ages 16 to 19).
 Mostly (77%) white; nearly half are white women.
 Largely part-time workers (64% of the total).
The below charts will also further illustrate the minimum wage changes over time, along
with a look at the types of employment that commonly makes up the minimum wage
groupings. They are as follows (Kurtz & Yellin, 2015) (Desilver, 2014):
Summary of the Present – Trends By State/Region
The last key point that needs to be addressed in this section is the difference between
states and regions of the country when it comes to the minimum wage paid to workers in that
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9. state. States have to meet the bare minimum of the federal minimum wage, $7.25 an hour, but
can choose to pass their own legislation that makes employers pay workers more on top of that.
Much of it is dependent on the perceived and calculated cost of living for a certain state along
with the number of workers a state may project to be on the minimum wage level. For example,
western states such as Oregon and Washington have the highest per state minimum wages in the
country (Ausick, 2014). To the contrary, many southern states such as Alabama and Mississippi,
where the cost of living is not near as much, have minimum wages at the federal level (Ausick,
2014). Below is a map of the United States showing the minimum wage for all fifty states. We
can see very clearly that there are trends by region, with similar states in similar parts of the
country having wages that are nearly identical. It will be interesting to see if this wage
discrepancy continues or even worsens into the future. The chart is shown below:
ARGUMENTS FOR RAISING THE FEDERAL MINIMUM WAGE
The next part of my analysis dives into the reasoning behind raising the federal minimum
wage and why its supporters believe so deeply in its cause. The federal minimum wage, as
mentioned earlier, has not been raised to a new level since 2009. That is when the twenty six
month period ended and the last incremental raise that was covered by the Fair Minimum Wage
Act of 2007 was implemented. I will look at three key arguments used by supporters of raising
the minimum wage and dive further into each one. There are many reasons given to raise the
wage to new levels, but these are the three most prominent I have come across.
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10. Overall Strengthening of the Economy
The first argument I will use will center on the most powerful politician in this country,
Barack Obama. Even though he does not have congressional power, or even a majority currently
in Congress, the President has a great influence on the issue and has power to help enact change.
President Obama has been very outspoken on the issue and particularly in his support for raising
the federal wage to heights it has never seen. In fact, some of his most outspoken words came in
the State of the Union Address in front of Congress in 2015. “Of course, nothing helps families
make ends meet like higher wages…and to everyone in this Congress who still refuses to raise
the minimum wage, I say this: If you truly believe you could work full-time and support a family
on less than $15,000 a year, go try it. If not, vote to give millions of the hardest-working people
in America a raise” (WhiteHouse.gov, 2015). The President’s argument centers around the fact
that it is impossible for a family to survive on such little pay. He lays out a plan for the
minimum wage to be raised to where a single parent could support a family on a minimum wage
salary. “At the federal level, the Obama Administration has expressed support for the Raise the
Wage Act proposed by Senator Murray and Representative Scott, which would increase the
minimum wage to $12 by 2020. The President has also taken action to raise wages for workers
on all new federal contracts to $10.10 or higher. Raising the minimum wage nationwide will
increase earnings for millions of workers, and support the local economies where they live, work
and spend their earnings” (WhiteHouse.gov, 2015).
The overall economy strength can be seen most especially with the most basic and lowest
earning employees in the system. These workers are the backbone of a powerful economy and
supporters of raising the wage argue that taking care of these workers is essential to our economy
thriving. “What may seem like small change to wealthier people, he said, would allow people in
his situation to be at least a little better off: "I'd be able to buy better quality food some of the
time. I could pay for gas and car insurance, so I could drive to my job instead of taking public
transportation or riding a bicycle. And it would help me be able to pay my electricity and phone
bills on time” (Greene, 2014). The basic argument is that the wealthy people will still be
wealthy and have as much as they did before. But by raising the minimum wage, low earning
workers can then afford to pay for a bigger share of their pull and put less strain on the
government to provide for them. Bob Greene also asks in his piece for CNN.com, imagine what
it would feel like to be one of those workers who finally feel what it’s like to be supported by
your employer (Greene, 2014). That type of impact is why many believe in empowering the
workers for a positive overall economy.
Public Health Argument
Another argument that is popular amongst supporters of raising the minimum wage is the
positive public health alternative that can take place. Dating back to the industrial revolution
when farmers moved to more urban areas where the work was, lower wage earners have
traditionally seen worse living and health conditions. Studies have shown that raised wages may
actually increase the overall health of the country and lessen the load on our already taxed
healthcare system. “The relationship between health and income is not just about individual
access to medical care, but how income affects a range of opportunities for health. Communities
of residents with higher incomes are likely to have better recreational amenities, housing stock,
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11. food access, and schools, and tend to be safer – all of which impact health. Income is also
associated with other factors that create the opportunity to be healthy, such as employment
opportunities, reduced environmental contamination, and greater transportation options. Health
improves with increasing income, and the impacts of a rise in income are greatest for those at the
lowest end of the wage scale. Moving from the lowest income level to the next lowest provides
the largest percentage increase in life expectancy and health status. In other words, a family
living on minimum wage realizes greater health benefits from an increase in salary than a
middle-class family receiving the same raise” (Ehlinger, 2014).
On the topic of public health and whether or not raising the wage would have a positive
impact on overall health, there was an interesting study done in the state of California relating to
this topic. In May 2014, Human Impact Partners along with health officers from the state of
California did a study on the impact of raising the minimum wage to $13 an hour by 2017. The
findings were pretty staggering in terms of the impact it would have. The findings showed
nearly 389 premature deaths would be avoided and the following scenarios as well (Bhatia,
2014):
 Californians in families whose income increased as a result of the higher minimum wage
would be more likely to be born healthier, develop stronger bodies and brains, and suffer
from fewer chronic diseases as adults and into old age.
 Fewer Californians would live in poverty, ensuring that they would get enough to eat.
Fewer would be forced to live in the unhealthy environments of substandard housing and
poor neighborhoods. More Californians would have adequate health care and access to
health insurance.
 More of California’s children would be well prepared for school and achieve more in
school, which in itself leads to healthier adult lives. Children would miss fewer school
days.
 Fewer people would smoke. In California, adults in families in poverty are 50% more
likely to smoke than those in families earning more than three times the poverty level.
 More would exercise regularly and fewer would be obese or overweight. In California,
teens in families living below the poverty level are 2.5 times as likely to be overweight or
obese as teens in families whose incomes are at least three times the poverty level.
 Fewer Californians would suffer from emotional and psychological problems, such as
depression and poor self-esteem. Families who live in poverty are over twice as likely to
face serious psychological distress and to suffer from family life impairment as those in
higher income families.
These statistics, albeit far from proven, show a glimpse into why many are very supportive of
raising the minimum wage and why many fight for it every year.
Increased Worker Productivity
The last main point in regards to support for raising the minimum wage revolves around
worker productivity and the incentive theory of humans. We have all learned throughout our
studies of the incentive based system where workers are more inclined to work harder and
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12. perform far more superior when they are earning a wage they are content with. The chart below
is designed to illustrate the issue many feel is far too prevalent in our society. This chart shows
how wages are not meeting productivity, and even though these workers aren’t being paid what
they are worth, they are still producing at a very high rate (Burbank, 2014):
The main argument is that if workers are productive enough for 241% performance, why they
aren’t even being paid half that amount in wages. There is also the stark contracts between and
even pay per productivity in 1972, and now a nearly 133% difference in how these same workers
are compensated. This unfair pay structure has gone too far for many, and they believe it is time
to pay workers what they deserve.
The last key point for this reasoning behind raising the minimum wage is to show an
example where this idea actually came to fruition. Three economists ran a study that clearly
shows this to be true, at least in their setting. These economists took 266 data entry workers and
increased their wages by $1 without any explanation for why (Gazette & Leddy, 2013).
Contrary to common belief, the workers didn’t view this as a free gift, but rather worked harder
at their tasks (Gazette & Leddy, 2013). “"Those who were promised $3 but then later were given
an additional $1 worked significantly harder than the other two groups," he said.”We attribute
this to the salience of the gift: It was obvious to them that we didn't have to give this additional
compensation, but that we had chosen to." The gift "signaled that we had done something nice
for them which they may want to reciprocate." And they did reciprocate, with higher
productivity” (Gazette & Leddy, 2013). This example is far from perfect, as some groups did
not show marked improvement. But the point still remains that there are many examples of
worker productivity increasing with the same increase in their wages.
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13. Arguments against Raising the Federal Minimum Wage
After taking time to look at arguments for raising the minimum wage at the federal level,
it’s now time to look at arguments to the contrary. There are many politicians, economists, and
business veterans who feel raising the minimum wage would have a reverse effect on employers
and employees. There is a strong belief by many that a rise in base mandatory wages would
have a reverse impact on employees when compared to the arguments listed in my previous
header. These next sections will look towards arguments against raising the minimum wage and
why those arguments hold up with facts to support them.
Potential Large Unemployment Rise
One of the more popular arguments against raising the minimum wage focuses not on the
wages themselves, but rather the amount of workers who will be able to earn those wages. A
major fear of many is that the economy always has a way of correcting itself. If employers
appear to be threatened by a hike in wages, they may very well choose to simply hire fewer
workers. Employer consolidation may very well be a real possibility with employers choosing to
hire fewer workers to absorb the risk of having earned wages increase within their small or large
business. This belief is detailed in the real-life analysis don o n the fast food workers of
Pennsylvania and New Jersey from 1995. To summarize, fast food workers from Burger King,
KFC, Wendy’s, and Roy Rogers received a pay increase in 1994 to their base minimum wages
(Neumark & Wascher, 1995). An original study was completed using a telephone survey and the
results were detailed by a 1994 report compiled by economists David Card and Alan Krueger.
Card and Krueger’s report went on to state that the increase was beneficial to all parties involved
and the wage increase was absorbed to benefit the employees who received them (Neumark &
Wascher, 1995). David Neumark and William Wascher went on in 1995 to reevaluate the
findings based on actual payroll information from the four listed companies and had interesting
findings that disputed the original report.
The 1995 report detailed some very interesting findings that established a contrary result
to the original report. Their findings showed that employees in both Pennsylvania and New
Jersey actually decreased by a substantial amount between the four fast food companies
(Neumark & Wascher, 1995). “In contrast, estimates based on the payroll data suggest that the
minimum wage raise in New Jersey led to a 4.6% decrease in employment. This decrease is
statistically significant as it shows an employment elasticity of -.24” (Neumark & Wascher,
1995). This is really interesting finding as it details a direct contrast to the original report based
on a telephone survey. What it appears to show is that the four major fast food employers
decided to consolidate their workforce in an effort to offset the increase in wages that would be
paid out. The report also shows that not only was there an employment correction to break even
on the wage increases, but as many corporations would do, the fast food companies decided not
to increase reviewed wages by the same amount as the previous year (Neumark & Wascher,
1995). This shows that not only may a minimum wage increase directly affect wages in the
present, but may also effect wage increases in the future as companies forecast accordingly.
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14. One of the lesser known casualties of an unemployment rise is the makeup of the workers
who would be directly affected. Employees earning minimum wage in the U.S. traditional are
minorities, young workers, and women. Many of the arguments from my earlier headers
indicates that minimum wage increases will look to take these three groups and raise them
considerably above the poverty level dependant on their personal situation. To the contrary,
many argue that policies increasing the minimum wage would actually hinder these groups they
are designed to assist. A report compiled by Andrew Syrios of the Mises Institute details his
belief that these groups would be the most adversely affected by a minimum wage increase.
“The minimum wage is constantly sold as good for workers, or minorities or women. In truth, it
hurts the most vulnerable and those its well-intentioned sponsors intend to help (Syrios, 2015).
A study by Jeffrey Clemens and Michael Wither evaluated the effect of minimum wage increases
on low-skilled workers during the recession and found that minimum wage increases between
December 2006 and December 2012 “… reduced the national employment-population ratio by
0.7 percentage points (Syrios, 2015). ”That amounts to about 1.4 million jobs. And more
noteworthy, that “… binding minimum wage increases significantly reduced the likelihood that
low-skilled workers rose to what we characterize as lower middle class earnings.” Yes, it’s hard
to make ends meet with a minimum wage job and such jobs certainly aren’t enviable. That being
said, cutting out the bottom rung from people just makes it all the harder to get by. A bad job is
better than no job and it is often the first step to something better. This is further shown by an
illustrative chart provided by economist Mark Perry comparing the minimum wage with teenage
unemployment. The two are almost perfectly correlated” (Syrios, 2015).
Not only does a minimum wage increase have an effect on minorities, but also low-
skilled workers in general, regardless of ethnicity, age, or gender. Low-skilled workers make up
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15. nearly seventy percent of minimum wage earners and are very vulnerable to any type of change
in the economy. These are the exact type of workers that take the brunt of any type of negative
impact on the economy. “Economists have written scores of papers on the topic dating back 100
years, and the vast majority of these studies point to job losses for the least-skilled. They are
based on fundamental economic reasoning—that when you raise the price of something, in this
case labor, less of it will be demanded, or in this case hired. Among the many studies supporting
this conclusion is one completed earlier this year by Texas A&M’s Jonathan Meer and MIT’s
Jeremy West, which reaffirmed that “the minimum wage reduces job growth over a period of
several years” and that “industries that tend to have a higher concentration of low-wage jobs
show more deleterious effects on job growth from higher minimum wages” (Neumark, 2015).
The broader research confirms this. An extensive survey of decades of minimum-wage research,
published by William Wascher of the Federal Reserve Board and me in a 2008 book titled
“Minimum Wages,” generally found a 1% or 2% reduction for teenage or very low-skill
employment for each 10% minimum-wage increase” (Neumark, 2015).
The last major part of the employment discussion when it comes to raising the minimum
wage is the effect it will have on small businesses. Small businesses are the backbone of the
American economy and any type of negative effect on them could be catastrophic and slip the
economy back into a recession. One of the popular theories amongst those against raising the
minimum wage is that small businesses will be adversely affected due to the small payroll
flexibility they have. The potential for a wage increase could do severe damage to the small
business market according to the Small Business Chronicle. “The minimum wage directly
affects small businesses because a large amount of their earnings go directly to pay for operating
expenses, such as equipment, supplies, lease or mortgage, credit lines, inventory, and employee
wages and benefits. The single largest cost to small businesses is the latter; employee wages and
benefits and is also one of the few costs that can be controlled. However, if a higher minimum
wage is enacted; they must hire fewer employees or downsize to comply with the minimum
wage law, which has a direct impact on unemployment rates” (Richardson IV, 2015). The report
also goes on to detail some other impacts of a wage hike, including the affects of those in
poverty and labor markets as a whole. “Research conducted by the Heritage Foundation in 2003
found that raising the minimum wage would not curtail poverty levels because of the percentage
of people employed full-time earning minimum wage, and "review of the Census data indicates
that fewer than one-quarter of those affected by the proposed new minimum wage work full
time" (Richardson IV, 2015). This means 75 percent of minimum wage earners are part-time
employees and do not rely on their income to sustain current or higher living standards, which
translates to a slight increase in consumer spending but does not positively impact poverty
levels” (Richardson IV, 2015). “Labor is a commodity and therefore is subjected to market
forces. If the minimum wage is increased by the government, more skilled and educated workers
will also seek pay increases as persons that are unskilled and not as educated are awarded a
higher wage not because of market forces, but government policy (Richardson IV, 2015). This
increases volatility in the labor markets as experienced and skilled workers are forced to reassess
their value upward, which may not be accepted by employers” (Richardson IV, 2015).
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16. Cost To Employers
Right after unemployment and the issues a minimum wage hike would cause for people
maintaining or looking for a job, the cost to employers would rank second on the large scale
concerns many have in a minimum wage rise. Employers across the country, from large to
small, have issues already with the cost of labor. This issue ranges from wages all the way to
benefits. It’s this very cost of labor that has caused many small businesses to shut down, and
large corporations to ship jobs overseas in an effort to curb costs. It is these very issues that I
have researched and plan to address in this section.
The first group I wanted to research when it came to the cost on employers for raising the
minimum wage was those very important small businesses. As has been stated at nausea by
economists and politicians alike over the last few decades, small businesses are the very
backbone of our nation’s economy. It makes up the largest employment block of our country’s
employers. It is also one of the largest employment sectors of minimum wage workers in the
U.S. To start, small businesses are represented by large groups that are advocates for them in
Washington D.C. Those two groups are the National Small Business Association and National
Federation of Independent Business. Needless to say, these two groups are some of the most
vehemently opposed to a minimum wage hike in the country (Harrison, 2014). This is very
important to note as it has officials voted on by panels of small business owners across the
country. “On one side, the National Small Business Association and National Federation of
Independent Business continue to push back against raising the minimum. They have long
argued that requiring employers to pay workers more will force many of them to either cut back
on hours, put off hiring, or lay off employees in order to keep their labor costs down (Harrison,
2014). “Raising the minimum wage will kill jobs and stifle economic output,” NFIB Manager of
Legislative Affairs Ashley Fingarson said earlier this week, as the organization sent a letter to the
Senate urging lawmakers to vote against a bill that would raise the minimum hourly rate from
$7.25 an hour to $10.10 an hour (Senate Republicans blocked the legislation from moving
forward on Wednesday) (Harrison, 2014). While reading these words and looking ahead to the
future, it appears these two associations will be steadfast in their lobbying against a minimum
wage rise at the federal level.
One of the examples I gave earlier in my research was the astronomical new minimum
wage rate in the city of Seattle, Washington. It has been lauded by many as a new example of
how low earning workers will be compensated moving forward. However, this has not been a
universal sentiment. In fact, many small business owners are up in arms over a perceived
inability to keep up with changes the new laws passed by the city. Many of the small business
owners in Seattle took to action and spoke to city council when they were granted the
opportunity to do so. “Kathrina Tugadi, owner of Mr. Villa Mexican Restaurant, said in a
statement to the city council that she supports raising the minimum wage. But $15 is too high.
“Seattle’s economic future IS at stake,” Tugadi said (Spors, 2016). “A minimum wage increase
is only one part of the solution to income inequality and this drastic minimum wage increase will
put an unfair competitive burden on small independent businesses. Another restaurant owner,
Tom Douglas, owner of Palace Kitchen, said a $15 wage would force him to cut 20 percent of
his staff and force him to raise his menu prices by about $5 per meal (Spors, 2016). Although
15

17. these statements were made in front of city council, the city has refused to alter its course and
plans to fully implement the wage hike. City councilwoman Sawant was quoted saying
businesses are hiding behind these arguments, but are simply unwilling to pay workers a fair
wage to support their families (Spors, 2016).
The other side of this argument transitions from small businesses to large corporations
across the country. In fact, it is big business which will feel the true brunt of any proposed
action, as they employ workers across the country in multiple states and cities. How big business
feels will also impact many other facets of the economy such as the stock market and national
numbers of employment which I touched on earlier. Two major lobbying firms in Washington
that represent major business and commerce across the country spoke out in 2014 about any
wage hikes that may be included in upcoming bills. David French, top lobbyist for the National
Retail Federation, defended the group's opposition of the bill, and blamed the media for
continuing to cover such a political maneuver (Liberto, 2014). "It is thoroughly a political
exercise and our goal is to create a strong economy across the entire industry," said French. "Our
concern with the minimum wage increase at this time is it didn't meet that standard" (Liberto,
2014). A spokesperson for the National Association of Truck Stop Operators declined to
discuss its position on minimum wage, but its website asks members to tell lawmakers that
"higher labor costs without any anticipated increase in revenue or profits put significant pressure
on businesses that operate under slim margins” (Liberto, 2014). The Society of American
Florists, which represents small independent flower business owners, also signed a letter
opposing hiking the minimum wage. But spokeswoman Jenny Scala said "we don't actually
advocate for or against this issue because most floral industry workers are already receiving
above minimum wage" (Liberto, 2014). What many of these groups are concerned about
revolves around the issue of new expenditures mandated by government without the additional
revenue to back them up. It has also been cited that wages and direct labor costs already make
up such a huge percentage of costs to begin with. By placing this extra burden on companies,
governments are taking a huge risk.
This risk is mainly shown by employment numbers. One huge concern by many is that
potential wage hikes will force companies to expand their employment ventures overseas. This
would put many American out of work with no way to provide for their families. The terrible
truth of this can be found in a very interesting article by Robert Lenzner from Forbes.com.
Lenzner argues that there is a “terrible truth” out there about the booming growth of U.S.
companies supporting their foreign affiliates with job creation far more than they are doing it at
home (Lenzner, 2011). He lays out some very interesting numbers that spell out a very ominous
future for Americans earning lower wages if a wage increase were to happen. Since 1982 the
index of jobs going to the foreign affiliates of U.S. companies has risen some 80% from a low of
100 in 1982 to 180 currently. By comparison, the index of jobs at the U.S. affiliates of U.S.
companies rose from 100 in 1982 to a peak of 130 in 2000–before the tech bubble and the
housing bubble– and in the last decade has fallen back to 110. This means the number of jobs
created by US companies inside the nation has risen by only 10% over 30 years (Lenzner, 2011).
By another comparison, the jobs created by new small business in the U.S. have increased by 20
million over the 1980-2005 periods. We will try to determine if this rate of job creation is
16

18. continuing. Obviously, something must be done to reduce the unemployment rate of 9.1%– as
well as the underemployed rate of 15-20% (Lenzner, 2011). Kauffman’s Dane Stangler, director
of research, believes many of these new jobs were created by employees, who lost their positions
at a large company, and t hen went into business for themselves. This probably won’t be
sufficient to dent the unemployment rate today (Lenzner, 2011). All of these numbers are
spelled out in the chart below. You can see throughout the years how foreign affiliates of U.S.
tax-paying companies have increased dramatically over time. The next statement from
Lenzner’s article speaks to unemployment and this very GDP growth, or lack thereof, from these
very companies. Public policy measures like the Fed’s quantitative easing and the Obama
administration’s Recovery Act just did not pack sufficient wallop to get the job done. “To bring
the unemployment rate down, GDP growth needs to be more rapid,” Christina Romer, former
chairman of Obama’s economic advisors, said recently in a speech. “We need to be adding not
100,000 to 200,000 jobs a month, but more like 400,000 or even 500,000 per month (Lenzner,
2011).
POLITICAL INFLUENCES ON THE ISSUE
A common theme throughout this research project has been the issue of politics. As with
anything that tries to pass through Washington D.C., the sentiments of politicians and the mood
in Washington are both very important. This is perhaps no more true than when looking at the
potential new President of the United States. That is why I have decided to take a look at each of
the four major Presidential candidates from each party and where they stand on the issue of
raising the federal minimum wage.
Donald Trump
Mr. Trump has been a major candidate for the Republican nomination for the White
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19. House. He has in fact appeared to become the frontrunner to receive this nomination. When it
comes to many issues he has discussed in a public manner, Mr. Trump has displayed varying
degrees of support for both sides of this issue. Let’s first take a look at Trump’s stance before he
became a candidate for the presidency. Back in late 2015, Donald Trump when on record as
supporting a plan to increase wages for those in the middle class. Although not all of these
people are minimum wage workers, many of them are or have a direct family member that is on
that line. “Trump continued Monday morning, pointing out the problems that plague middle
class workers. This summer, Trump said the middle class was getting hurt and that he would
lower their taxes to save them” (Luhby, 2015). “Wages in our country are too low, good jobs are
too few, and people have lost faith in our leaders. We need smart and strong leadership now!”
(Luhby, 2015). Trump also came out in support of a few policy initiatives he planned to
implement if he were to become President. He has said that his tough stance on immigration
would make it easier for poor and working class Americans to earn a middle class wage. He
would also create a resume bank for inner city youth to help them land employment. And he
would change the rules of certain work visas to encourage companies to hire more American
workers (Luhby, 2015). Trump said he would also reform trade rules with China and lower the
corporate tax rate to stop companies from shipping jobs overseas (Luhby, 2015). His tax plan,
which he says would help the middle class achieve the American Dream and boost the economy,
would cut taxes for everyone, but the largest reductions would go to the wealthiest Americans, a
Tax Policy Center analysis found (Luhby, 2015).
To be fair to Mr. Trump, he has appeared to form a more concrete approach to this issue,
however different it may be from his original stance. He has now become much more in line
with the conservative stance on the issue. Trump now says that wages are too high, and too
many companies are forced with the tough choice of whether to keep workers employed, or cut
them in order to save on rising labor costs. While answering a question in a Republican primary
debate, Trump had the following comments to moderator Neil Cavuto. “I can’t be, Neil. And the
reason I can’t be is [that] we are a country that is being beaten on every front economically,
militarily. There is nothing that we do now to win. We don’t win anymore. Our taxes are too
high. I’ve come up with a tax plan that many, many people like very much. It’s going to be a
tremendous plan. I think it will make our country and our economy very dynamic. But, taxes too
high, wages too high, we’re not going to be able to compete against the world. I hate to say it,
but we have to leave it the way it is. People have to go out; they have to work really hard and
have to get into that upper stratosphere. We cannot do this if we are going to compete with the
rest of the world. We just can’t do it” (Atkin 2015). When pressed on that answer for a
definitive statement on the issue, Mr. Trump emphatically said his plan is to not raise the federal
minimum wage (Atkin, 2015).
Ted Cruz
Ted Cruz appears that he will not be the nominee for the Republican presidential
platform, but his importance as a member of Congress will go a long way in shaping the dialogue
on this issue. He has been much more consistent on this matter, and agrees with where Donald
Trump appears to be right now. Cruz has tried to be a champion for the middle class, but has
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20. come out in support of leaving the wage right where it is. In 2013, Cruz spoke out emphatically
against President Obama’s initiative to try and pass a rise for minimum wage in his second term.
“If you raise the minimum wage, the inevitable effect will be, number one, young people will
lose their jobs or not be able to get their first jobs,” Sen. Ted Cruz (R-Texas) told CNSNews.com
(Lucas, 2013). “Unemployment among young people will go up if the minimum wage goes up
as President Obama says. Unemployment among Hispanics, among African Americans, among
those struggling to get their first job to climb the economic ladder, will go up” (Lucas, 2013).
Cruz said his father, a Cuban immigrant who didn't speak English, got his first job as a
dishwasher, making 50 cents an hour. "If President Obama had had his way, the minimum wage
would have been raised from 50 cents to $2 and they wouldn’t be able to hire my dad,” Cruz
said. “It would have cost him the first job that let him pay his way through college that led him to
eventually building a small business (Lucas, 2013). "Every one of these policies tonight makes it
harder on those struggling to achieve the American Dream. And I think they are wrongheaded
solutions that don’t serve the best interests of the American people” (Lucas, 2013). Since
running for President over the last year, Cruz has held this position throughout his campaign.
Hillary Clinton
On the other side of the aisle, the Democrats have opposing view from that of Trump and
Cruz. The first Democratic candidate I’ll look at is Hillary Clinton. She has a very unique look
on the issue as she was First Lady when her husband, Bill Clinton, passed legislation making
amendments to the federal minimum wage. She has been evasive on the issue when compared to
other Democrats, but most likely would fall in line with the current plan of President Obama
which I detailed earlier. From looking at her website, she has a few initiatives to help working
families “even the playing field” as she describes it. The following excerpts are policy initiatives
from her campaign website. “Ensure more workers share in near-record corporate profits.
Corporate profits are near record highs—but workers have not shared through rising wages.
Profit sharing is linked to higher pay, benefits, and productivity. That’s why Hillary’s plan
creates a 15 percent tax credit for companies that share profits with workers on top of wages and
pay increases” (Clinton, 2016). “Reform our tax code so the wealthiest pay their fair share.
Hillary supports ending the “carried interest” loophole, enacting the “Buffett Rule” that ensures
no millionaire pays a lower effective tax rate than their secretary, and closing tax loopholes and
expenditures that benefit the wealthiest taxpayers to pay for her plan to make college affordable
and refinance student debt” (Clinton, 2016). “Raising the minimum wage and strengthening
overtime rules. Hillary believes we are long overdue in raising the minimum wage. She has
supported raising the federal minimum wage to $12, and believes that we should go further than
the federal minimum through state and local efforts, and workers organizing and bargaining for
higher wages, such as the Fight for 15 and recent efforts in Los Angeles and New York to raise
their minimum wage to $15. She also supports the Obama administration’s expansion of
overtime rules to millions more workers” (Clinton, 2016). Secretary Clinton has come under
some scrutiny for the last portion I showed from her website. She has come out in support of
those efforts to bring minimum wage up to $15/hour, but her policy only states that she would
increase it to $12.
19

21. Bernie Sanders
Bernie Sanders is the opposition to Hillary Clinton on the Democratic side and has gained
traction for many of his domestic initiatives. On this issue, Sanders is perhaps one of the more
outspoken politicians and believes in a complete overhaul of “living wages” as he calls it in the
future. He has been the most outspoken candidate in support of the $15/hour wage and would
implement that structure nationally if he were to become President. The following are key
domestic initiatives relating to living wages for Americans from Sanders’ campaign website.
“Millions of Americans are working for totally inadequate wages. We must ensure that no full-
time worker lives in poverty. The current federal minimum wage is starvation pay and must
become a living wage. We must increase it to $15 an hour over the next several years” (Sanders,
2016). “We must also establish equal pay for women. It’s unconscionable that women earn less
than men for performing the same work. Millions of American employees have been working 50
or 60 hours a week while receiving no overtime pay. That is why Bernie has been encouraging
the Obama Administration to ensure that more workers receive overtime pay protection. The
Administration’s new rule extending that protection to everyone making less than $947 a week is
a step in the right direction. It is a win for our economy and for our workers (Sanders, 2016).
Lastly, we must support and strengthen the labor movement to ensure that workers have a say in
their own economic futures. That’s why Bernie has been a strong supporter of the Employee Free
Choice Act, which would make it easier for workers to organize and bargain collectively
(Sanders, 2016). As you can see from those statements, Sanders is very progressive in his
thinking on the issue and falls in line with many of the proponents I discussed in my earlier sub
header. Below are the key initiatives he would like to implement:
 Proposed a national $15 per hour minimum wage.
 Led the effort to increase the minimum wage for federal contract workers to $10.10 an
hour.
 Introduced the “Workplace Democracy Act” to strengthen the role of unions and the
voices of working people on the job.
 As mayor of Burlington, was a strong collaborator with unions.
 Leading the fight in the Senate for a $15 an hour minimum wage and a union for fast
food workers, and federal contract workers.
OUTCOMES OF GOVERNMENT ACTION
For the last research portion of my project, I would like to take a look at the potential
outcomes from government action and where the issue will lie moving forward. This is very
important issue to many Americans and where the issue goes from here is very important to them
and many other Americans.
The Implementation Phase
If a new plan is voted on by Congress in the near future, it is vital to analyze how a new
wage hike would be implemented across the country. We’ve seen examples of this in cities and
20

22. states, but we have not seen it at the federal level in nearly eight years. Also, the implementation
would be extremely important if the wage were to increase substantially to $15/hour. While
looking around the country for examples, I took to Seattle for a more micro example of what
may take place. This would obviously be dependent on a Democrat becoming President rather
than a Republican, and a bill making its way through a divided Congress to the President’s desk.
The following schedules are detailed plans laid out by Seattle city council on how their minimum
wage increase would be implemented. The below is for Schedule 1 employers (>500 employees)
(Murray, 2016):
 $11.00 by April 1, 2015
 $12.50 by January 1, 2016
 $13.50 by January 1, 2017
 $15.00 by January 1, 2018
The below stages are for Schedule 2 employers (500 or fewer employees) (Murray, 2016):
 $10.00 by April 1, 2015
 $10.50 by January 1, 2016
 $11.00 by January 1, 2017
 $11.50 by January 1, 2018
 $12.00 by January 1, 2019
 $13.50 by January 1, 2020
 $15.00 by January 1, 2021
 $15.75 by January 1, 2022
 $16.50 by January 1, 2023
 $17.25 by January 1, 2024
The following stages are for Schedule 3 employers with minimal compensation and less than 500
employees (Murray, 2016):
 $11.00 by April 1, 2015
 $12.00 by January 1, 2016
 $13.00 by January 1, 2017
 $14.00 by January 1, 2018
 $15.00 by January 1, 2019
 $15.75 by January 1, 2020
As you can see, the city of Seattle and Mayor Ed Murray have come up with a tiered approach
represented by stages. This is most likely the approach the national government would take
when implementing these changes. These are designed to give employers enough time to make
any changes they may want and be able to prepare properly for the changes.
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23. The Future of the Debate
While looking at how a plan would be worked into the American culture and economy, it
is important to close my research by looking at where the issue goes from here. The odds of
seeing anything substantial in the coming months or even over the next year are remote at best. I
anticipate seeing a very vigorous debate as we inch closer to November 2016. The issue will
become a major point on the campaign trail as no matter which candidates are pitted against each
other, there will be stark differences on both sides of the issue. If a Republican is to gain the
White House, I can’t see a rise in minimum wage happening over the next ten years. I feel that
there may be an incremental increase to keep up with inflation, but as seen in my research, we
are actually at levels very similar to that adjusted for inflation. Even if Democrats were to win
back power in Congress, I don’t see a Republican president signing off on legislation raising the
wage. If a Democrat is elected president, this may very well be a different story. I foresee that
person trying to push legislation through that will raise the wage to at least $10/hour. We may
also see it packaged with other things for the opposing party to entice them to vote for it. With
Clinton as president, we will see her plan mimic that of President Obama’s. A wage increase up
to $12 will be her goal to satisfy those who supported her election bid. If Bernie Sanders is
elected president, we will see an aggressive platform that will look to take the wage as high as
possible to pass through Congress. This has been a consistent message in his campaign over the
last few months. However, I do not see anything substantial passing through a divided Congress,
regardless of who is elected President. The issue will then lie with the people. Our demands as
the people and what we want will have to be heard loud and clear if anything substantial were to
get passed to law.
CONCLUSION
In conclusion to my research paper, I want to first say how much I enjoyed covering this
topic and researching it. I first chose it as an issue that I felt was important, and one that would
be able to provide me with great empirical evidence from both the past and present. I found this
to be absolutely true. Due to the importance and how many Americans would be affected, it was
very interesting to read many of the different opinions I presented in my research and
presentation.
One piece of substantial, real-life evidence I was able to obtain came from my
employment with TJ Maxx in Pittston, PA. I was a floor supervisor in charge of twelve direct
reporting associates on a daily basis. These are union workers with Workers United who don’t
quite make minimum wage, but are close enough to gather information from. Workers United
and TJX Companies were in a labor dispute as a new contract was up to agree upon and sign. I
was curious about what my employee’s were debating as these discussions raged on. For the
sake of having first-hand research, I asked my employees to write down the three most important
issues to them with the upcoming labor negotiations. They did not have to provide their identity,
but I asked them to make a list of three items and then write a paragraph explaining why their top
choice was so important. Out of the twelve associates, nine of them put their wage increase as
the chief issue to them. The other three listed benefits or hours as the primary issue to them.
22

24. This really showed me the scope of this issue, its importance, and why it would be a good topic
for me write about. As I went about this project, I kept those same people in mind when trying
to present an unbiased approach to my research and the layout of this paper. I feel that I have
accomplished that and have given the reader an informational piece to digest and form their own
opinions on the minimum wage debate.
For the sake of providing my own opinion, I feel that there is a middle ground to this
issue. I don’t feel that anyone can make the argument that $7.15 is an adequate wage for
someone to be able to live outside of poverty. On the other hand, some of the wages that we
have seen across the country are outrageous for the work some of these employees are
performing. Is it justified for an employee at McDonald’s to make $15/hour? My answer to that
is simply no. If wages are raised to that level, what happens to the wages of workers in between
those two extremes? Are there wages raised? The answer to that would be no as well. Employers
will not be looking to pay more simply because other companies are forced to pay their
employees more for work that does not equate to being compatible. There runs the chance that
we will see such variance in pay, and the potential for skilled workers to be making less than
unskilled employees. The middle ground I mentioned is at $8.50 an hour. I feel this is a fair
national increase and will elevate employees by greater than $2,000 a year. These excess funds
will help pay for child costs and medical expenses which are the true expenditures we must focus
on. This wage would also raise 10% of those in poverty to the lower middle class. I feel this
would be an adequate middle ground and would gain support from enough people in Washington
to get passed.
I would like to thank Dr. Jennifer Edmonds and all the members of my MBA 592 class
for their hard work and support this semester. This was an enjoyable research opportunity and
one that I will take with me to any project I work on in my professional career.
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25. REFERENCES
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1(1), 1. Retrieved from http://thinkprogress.org/economy/2015/11/10/3721386/trump-
republican-debate-minimum-wage/
Ausick, P. (2014). States With The Lowest Minimum Wage. USA Today, 1(1), 1. Retrieved
from http://www.usatoday.com/story/money/personalfinance/2014/05/09/states-lowest-
minimum-wages/8870565/
Bhatia, R. (2014). A powerful prescription for better public health: raise the minimum wage.
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http://scienceblogs.com/thepumphandle/2014/06/09/a-powerful-prescription-for-better-
public-health-raise-the-minimum-wage/
Burbank, J. (2014). Raise minimum wage to begin addressing income inequality. The Stand,
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begin-addressing-income-inequality/
Clinton, H. (2016). A plan to raise American incomes. Economy, 1(1), 1. Retrieved from
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