Fair Labor Standards Act Summary

Minimum wage is defined as the lowest possible income that an employer can legally pay an employee. This ensures that all people are fairly paid and not defrauded by companies or businesses. Minimum wage is now a staple in 90 percent of countries in the world (Minimum). Even with these minimums, a person’s lifestyle is hard to maintain. Sustainability, in my opinion, is the ability to keep or maintain a certain amount of physical or mental property. In this light of sustainability, minimum wage is not a sustainable amount of money in which to survive with a basic quality of life.

There are many supporters and objectors to the minimum wage debate. Supporters say that increasing minimum wage increases the workers earning power and wages. Objectors say that increasing minimum wage only leads to unemployment due to small companies’ inability to pay workers. Also the increased inflation rate of goods only hurts the economy, which leads to many jobs being lost, mainly the jobs held by minimum wage patrons. Although this is a heated debate there is one thing to which both sides agree; something needs to be implemented so that workers are not exploited by businesses.

Economists are exploring the viability of minimum wage, the standard minimum wage payments, and if there is anything we can do to keep the world on an equal playing field. There are many thoughts and opinions on minimum wage. Minimum wage was put into practice to keep businesses from taking advantage of the “small people. ” Most of the workforce making minimum wage is “young adults” because companies feel that they can take advantage of them. The main reason that businesses exploit these workers is because many of these people have not entered or finished college.

Of the total affected workers, 81% are adults. Of these 81% adults, 63% are women and 37% are men. This shows that companies still have gender discrimination in the workplace. Companies are not only paying people ridiculously small amounts of money but are also exploiting women of America. Businesses are taking advantage of all human kind in the long run. Montgomery states that, “From the business perspective, wages come in as one of the most expensive running costs, and have to be paid whether you are taking money that day or not.

However, if there were no minimum wage, there is no doubt that many unscrupulous businesses would exploit staff wherever they could” (Inflation). Of these adult workers over half, 53%, work full time and another third, 31%, work between 20 and 36 hours per week. This statistic shows that 84% of adults on minimum wage work at least 20 hours a week. Bryan says that when minimum wage increases, it is a huge benefit because this usually adds a 10% increase to a final salary. This will directly affect millions of people in our workforce.

He says that the increase might make the minimum wage now a “living wage. ” Living wage is defined as a real wage that is high enough for the worker and family to survive and remain healthy and comfortable, this is sometimes called meeting basic needs (Investor). This would be a massive improvement in Americans’ wages because so many people are living in poverty. The one problem with the living wage debate is that living wage is not classified as minimum wage, so when minimum wage raises, this will not affect he living wage standards. There are many supporters and antagonists to the minimum wage debate.

Supporters say that minimum wage increases the standard of living for the poorest of people. This is a true statement, but the opposition says that this only drives up the standard of living and inflation rate in the world. Inflation is defined as the overall general upward price movement of goods and services in an economy, usually as measured by the Consumer Price Index and the Producer Index. Over time, as the cost of goods and services increase, the value of a dollar is going to fall because a person will not be able to purchase as much with that dollar as he/she previously could.

Though inflation is one of the main problems in our economy presently and even though inflation and minimum wage are directly related, the minimum wage law is set up to help people. In TV series documentary by Morgan Spurlock, he and his wife try to live on minimum wage for a month. He describes the hardships of living and surviving off such little money. He includes in his hardships living above a crack house and having no health insurance. In a recent trip to the doctor, with no insurance, he had to pay $851 for he and his wife out of his pocket.

He says this would take him 3 months on minimum wage with two incomes to pay off these medicals bills. Though I am not a fan of Barak Obama, his plan to institute a health care plan for everyone will relieve a huge burden on people and also allow them to “get out of the hole. ” Obama’s idea is to “require insurance companies to cover preexisting conditions so all Americans regardless of their health status or history can get comprehensive benefits at fair and stable premiums” (Healthcare). This basically means that Obama will guarantee health care for all Americans, not matter health status.

Spurlock also explains his total wages for a day. When working one job he made only 70 dollars before taxes, this boiled down to 42 dollars a day after taxes or about $4. 20 per hour. So when debaters discuss minimum wage, many times the small amount of money in debate is before taxes. As shown minimum wage is an enormous problem in this country. The Economic Policy Institution indicates that about “13 million people are working for minimum wage” (Facts). This boils down to about 10 percent of our work force.

These facts demonstrate that at least 13 million people are working under the same conditions that Spurlock performed under his experiment. Standard minimum wage presently is a base pay of $6. 55 an hour. This has increased from $5. 85 an hour just last year. The USA Today states that minimum wage will “raise the wage to $7. 25 an hour in two years” (Associated). The Fair Labor Standards Act ensures all of these wage dependencies. Fundamentally the Fair Labor Standards Act says that it is illegal to pay any worker under minimum wage. These subtle increases have allowed so many financial benefits to people.

Even though this does not sound like a massive pay raise, it adds up very quickly. This pay raise means a great deal to people because this is what these individuals have to live on day to day. Having this extra money not only allows for more expenses but also for more financial security. A main component that a large number of people live off of but do not always get a chance to work is overtime. Usually companies will not allow their worker to work overtime because the Fair Labor Standards Act says “that the worker must be given time and a half on every hour they work past forty hours” (Wage).

This means that companies now have to pay their employees $9. 83 an hour to do the job that they regularly do for $6. 55 and hour. When I worked for a country club, I was making minimum wage. They had very strict rules on what I made and how many hours I could work in a week. On one occasion, I accidentally worked over the forty-hour week. They said that they could not pay me for the extra hours let alone pay me time and a half for my work. Looking back on this experience I that I would have had a claim against them because not only was I not getting paid, but I was not receiving overtime pay.

While working this job, it was very hard for me to pay my necessary bills. Even though my parents were helping pay for my tuition and rent, I could barely afford to pay for necessities like gasoline, utilities, and car insurance. I had to get a second job otherwise, I could not imagine people having to survive earning minimum wage. In my opinion it is very hard for a person to endure making minimum wage. This does not allow for individuals to set up any kind of medical plans, 401(K’s), and portfolios. Even though 401(K’s) and portfolios may not be deemed necessities, healthcare is.

And by not having these healthcare plans many people’s life expectancies decrease tremendously. There have been many ideas for people to eliminate minimum wage and also keep paying jobs on an equal playing field. One way suggested is negative income tax. Negative income tax basically means that people are going to receive a tax break when they get their paychecks. Allen writes “Instead of tax liabilities varying positively with income according to a tax rate schedule, benefits would vary inversely with income according to a negative tax rate schedule.

If, for example the threshold for positive tax liability for a family of four was, say, $10,000, a family with only $8,000 of annual income would, given a negative tax rate of 25 percent, receive a check from the Treasury worth $500. A family with zero income would receive $2,500” (Allen). Usually when people get their paychecks about thirty to forty percent of their check is taken away by the government for things like social security, federal, state and city tax. This adds up to a lot of lost revenue taken by the government.

The negative income tax would allow for the difference in the income from the difference in the taxes to then be divided by a percentage. The sum of that percentage would then be the check that the family would receive. Another very sought after way to fix minimum wage is basic income. Basic income is the idea of social security, which periodically provides each working individual with an amount of money on which to live. A major problem with basic income is that everyone would receive the sum payments from the government.

No matter your status or income, everyone would receive these checks, which would cost the government mass amounts of money. An upside to the basic income proposal is that we would officially get rid of social security. This would save the government a great deal of money because social security, we would all receive the money. We all know that there are underlying faults in minimum wage. There is nothing right now that can fix minimum wage because if we raise the salary per hour, this will cause inflation. But one thing is certain, as Americans, we need to continue the minimum wage debate, so that we can keep American on an equal playing field.

Works Cited Allen, Jodie T. Negative Income Tax. Library of Economics and Liberty. 01 Nov. 2011. Ehrenreich, Barbara. Nickel and Dimed: on (not) Getting by in America. New York: Metropolitan, 2001. Print. “Inflation” Investment and Financial Dictionary by InvestorWords. com. Web. 01 Nov. 2011. . Montgomery, Sandy. “Inflation Hits Low-Paid Staff. ” LexisNexis. Web. 01 Nov. 2011. Morgan, Spurlock. “30 Days. ” 30 Days. FX. FX Networks, 15 June 2005. Television. The U. S. Department of Labor. Web. 01 Nov. 2011.