Minimum wage in the U.S. has been $7.25 per hour for the last 10 years. Raising it could lift low-income workers out of poverty, but it might also kill jobs and potentially hurt the economy. Should it be raised or stay the same?
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Why is the current minimum wage $7.25?
When the great depression hit in the 1930s, President Franklin D. Roosevelt wanted to do something about inequality. In 1938, he signed into the law the first ever national minimum wage at 25 cents an hour, which would equal about $4.45 today. Since that time, Congress has increased the minimum wage 22 times. The current level of $7.25 was last set in 2009, when President Obama signed it into law.
What are the benefits of raising the minimum wage?
For many supporters, raising the minimum wage is a basic issue of fairness in a society where income inequality keeps rising. They think putting more money in the pockets of low wage workers is an effective way to reduce poverty. So, what happens if you RAISE their wages to 15 an hour? A report from the Congressional Budget Office calculated that it would boost the pay of 27 MILLION workers, and would lift 1.3 million people above the poverty line. A lot of these low-wage workers make so little money that they qualify for some form of government assistance like food stamps or housing support. One study by the Economic Policy Institute found that for every dollar the minimum wage is increased, spending on government assistance DROPS by 5.2 BILLION dollars! So, if companies had to pay their workers MORE, it would actually SAVE the government money.