President Obama wants to increase the Federal minimum wage to $10.10 an hour by 2016. Several Nobel Prize winning economists and several other prominent economists have urged the Congress to increase the Federal minimum wage to $10.10 an hour. The median fulltime wage in the US stands at $19.55. Any increase in Federal minimum wage will benefit more than 17 million who mostly work in fast food restaurants. The first minimum wage of 25 cents an hour was introduced in 1938 during the President Roosevelt’s administration to address economic hard ships at the time and as a way to bridge the gap between the rich and poor. The act therefore labeled, Fair Labor Standards Act.
Many argue that it is wrong for the government to meddle with free market conditions and consider minimum wage issue as big government’s heavy handed meddling in the labor market. They repeatedly argue that the minimum wage is counterproductive and hamper employment. It creates more unemployment, they argue. However, studies conducted in various parts of the country prove otherwise. Some businesses were able to pass the additional cost caused by minimum wage hike to customers without reducing their bottom line.