How is the minimum wage determined?

Since its foundation in the 1930s, the US federal minimum wage has been a flash for controversy and a seemingly endless debate among lawmakers. Historically, the Democratic Party was generally the one who proposed it to be modified, which would largely benefit workers, while the Republican side tried to put the cap for the amount of increase, which is largely beneficial to employers. Depending on which political party has control of congress, the minimum wage cannot be modified for years, or it could be adjusted in decades. This council composed of legislators, economists and leadership of enterprises would consider the current social and economic climate to determine whether adjustments are required. Such factors such as the unemployment rate, the inflation rate, and the average revenue of the family, would theoretically determine the lowest wage of life, and the federal minimum would be modified accordingly. He was supposed to work on paper anyway.

In fact, there was never a established formula for determining the federal minimum wage. Some sources believe that it counts as a certain percentage of the current boundary of contemporary poverty for a family of four, but in recent years this has not been shown. Currently, inflation is not even indexed. It tried to combine the minimum wage with the annual inflation rate, but these proposals were not accepted. In fact, the latest increase received by Congress in 2007 does not correspond to the actual expenditure force of the 1979 adjustment.

Realistically, the amount of minimum wage is largely determined by the sponsor of the bill, the aim of which is to regulate. In this sense, the petitioner could normally introduce accounts in the Senate. Multiple of these accounts may die in the committee or do not receive sufficient support from the opposite political party. Once in a while, however, the bill will survive the initial process and a committee for studying the proposal is created.

During this review process, the final minimum can be determinedwage level. Opponents and lobbyists often represent their objections to wage increasing, citing an increase in labor costs, possible dismissal and a general increase for workers who are currently working just above the current minimum. Proponents may claim that the wage should be modified to maintain the pace with the real life costs, or to encourage the poor to choose work over public aid programs. At the end of these discussions, a new federal minimum wage usually occurs. However, as a concession to employers, the new wage is generally included in several years.

Maybe one day the amount will be indexed to a standard economic indicator, such as inflation or annual poverty line, but by then any increase will most likely be associated with political climate at that time.