Thesis Statement on Minimum Wage: Traditional Vs Modern Law

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Abstract

Using our knowledge and research of wage and hour laws to study minimum wage, law monitoring, statistics on entry leveled citizens and the labor economy: Locating the opportunities and obstacles between minimum wage laws, it will be determined on the occasion that minimum wage laws should or should not be abolished. The unique ways that companies and states have determined their wage with “living wage” has been adopted and financial, economic, and social consequences have been present. Statistics have shown that “The relatively large increase in the wage floor with the introduction of the NLW and plans to raise the NLW to 60% of median earnings by 2020, raises the possibility of detrimental effects on employee retention and hours worked.” (Aitken, Dolton, Riley, 2019). Using research on pay equity and equal pay, I will discuss the difference between pay equity and equal pay, equal pay for equal work policies, reasons why pay equity is more complicated than it seems, and many aspects that are included in pay equity. The goal of this study is to develop a model that defines wage and hour laws, and how prevalent these laws control the labor economy.

Minimum Wage Laws: Abolishment

Many employees start their first jobs at minimum wage. To some extent, people tend to start realizing as they grow older, that minimum wage is not enough for them, or they work more hours to make minimum wages work for them. According to an article written by Gindling, depending on the characteristics of the labor market, raising the minimum wage in developing countries can increase or decrease poverty. Minimum wages are aimed at public sector workers— a minority in most developing countries— many of whom are not living in poor households. How raising minimum wages decreases inequality depends not only on how formal sector workers lose employment but also on whether low-wage workers lose jobs. If the world looked toward abolishing minimum wage laws, then the world must look at the pros and cons of minimum wage laws in general, this means, not only the minimum wage laws in the U.S. but around the world. Looking at the pros of minimum wage laws, there are, when job losses in the private sector are low, unemployment would likely be reduced by raising the minimum wage. When the minimum wage rises, higher minimum wages are likely to reduce unemployment if the informal sector wages rise, higher minimum wages are likely to reduce inequality because people earning the minimum wage are members of low-income households, and when low-income employees lose jobs and are unable to find jobs because of higher minimum wages, social security networks may shield low-income households from increased poverty. Some cons of minimum wages are, when higher minimum wages lead to employees losing traditional jobs in the industry, unemployment will not be minimized, and if a large pool of informal workers is not covered by minimum wage legislation, higher minimum wages are unlikely to reduce poverty, when secondary family members are the jobs impacted by the minimum wage, higher minimum wages will not reduce poverty, higher minimum wages would exacerbate unemployment because low-income employees lose jobs and cannot find new ones due to higher minimum wages and there are no social security networks. In most developing countries, raising the minimum wage decreases poverty. The effect is small, however, because only a minority of the working poor are covered by the minimum wage; in general, it does not include jobs in broad informal sectors. And higher minimum wages generate losers as well as winners from poor households, which drives some out of poverty while others into it are dependent on the effects of work, salary distribution, and effects on the household. The increase in the minimum wage may be part of an overall poverty alleviation program but not the only or the only means of reducing poverty. While many business owners would give their employees a lower wage as compared to the minimum wage laws were at, if minimum wage laws have been abolished, business owners want to make a profit so the lower the employees’ wages, the more profit the business can gain, therefore, in my opinion, it is not appropriate to eliminate minimum wage regulations, a minimum wage has to be set in place.

Living Wage

A ‘ living wage ‘ means a basic income that offers more than mere subsistence, allowing workers and their families to be protected against unexpected disruptions in society and some range. According to a Journal of Sustainability Research, real households are diverse in terms of the number of households and employment, making living wages conceptually more of a continuous factor than a single constant across a continuum of wages. Creating a living wage is important to establish the possibility of emerging from working poverty traps and to foster an environment of work equity and work-life balance. Setting the ‘right’ living wage in terms of money is also important, as it is not possible for poverty to escape while setting an unforeseen high level of cost of living. The dynamics of the structure of the household and economic capital should also be taken into account when considering the effects of living wages on poverty. With regard to other earnings of individual earnings, people who are living in single-income households, especially if they had been at or close to the legal minimum wage, encountered a deeper poverty trap, and a far more drastic change in the quality of life and working life, from hitting the living wage barrier. Personally, I believe that the living wage needs to be further researched, as many are still in poverty. Providing decent wages for workers in global value chains would help support whole families and communities to emerge from poverty, accelerating the economic and social development needed by both public and private actors in their adoption of the SDGs. Human rights freedom, collective bargaining, and non-discrimination, among others, are key drivers for supporting the provision of a livelihood, that in turn can help to achieve human rights to food, water, health, housing adequacy, education, family life, fair working time, and so on. Under U.S. law, a state actor is an individual acting on behalf of a governmental body and is therefore subject to laws under the U.S. Bill of Rights, including the First, Second, and Fourteenth Amendments, which forbid the infringement of certain rights and freedoms by federal and state governments.

Pay Equity

According to an article written by Tara Murphy and Helen Zheng, if sexism is unconscious or deliberate, it is clear that there is a gender pay gap worldwide. The gender pay gap, however, is not just one phenomenon. To determine the size of the difference within the company, it should be viewed holistically and in the sense of other variables. Organizations should also regularly and constantly update and monitor internal compensation systems to identify inequities over time and ensure the execution of long-term plans. Just because the gender pay gap is not as high as it can be considered, businesses need to develop mechanisms to identify and avoid discrimination between women and men. Looking at the article, I can see that they have created such a plan to avoid situations like this. A detailed, firm-wide audit of pay equity should be conducted by companies. Factors such as performance ratings, seniority, training, and other factors that could add to the discrepancy should be taken into account and salary evaluations should consider not only fair salary but also incentives and bonuses such as how many leadership activities workers are invited to participate, this would include a comprehensive plan, after performing an evaluation to fix any observed wage inequities by director training, updated hiring procedures and salaries. I agree with using a method such as this, to regulate pay equity. There should not be any reason why one gender should be paid more than the other due to just gender. If businesses used such a form like this one, I believe, pay equity will slowly become equal. According to the Institute for Women’s Policy Research, females represent almost half the population within the workforce. For half of American families with children, they are the primary and co-breadwinner. Women earn more degrees from school than men. On average, though, females also earn significantly less than males. In 2018, full-time, year-round female workers made a gender wage gap of 18 million for only 82 cents per dollar received by males. This commonly cited figure can underline the degree of pay inequality; an IWPR study of women’s and men’s salaries over 15 years found that women paid for only half (49 percent) of what men earned. Also, according to the Institute for Women’s Policy Research, on average, women earn less than men in almost any individual job for which there are sufficient data on wages for both men and women to determine a percentage of earnings. Employees in jobs mostly done by women gain just 66 percent of workers in jobs mostly done by men in middle-skilled professions. The IWPR research on occupational gender and race discrimination reveals that overt racism in wages, recruitment, and advancement appears to be an important feature in work life. According to the IWPR, Hispanic women will have to wait until 2224 and Black women will wait until 2130 for equal pay. Coming from a Hispanic woman myself, this is absolutely ridiculous by any type of standard. It is not based on laws anymore, it really is based on the people. Currently, the world is having issues with racism in general, gender equality, and many other things. These issues are getting in the way of simply caring for one another. Yes, many people have different knowledge, and they study different things, but this should not take away from what race or gender gets paid the most.

Unexpected drawbacks

Employers are commonly aware of the basic minimum wage and overtime compensation provisions of the Fair Labor Standards Act. Ignorance of the law can lead to enormous collateral obligations. Employees who are supposed to be paid properly for every hour they work or pay a defined salary properly may be owed several times any actual wage difference. An employer who encourages a worker to work more hours than he/she is scheduled for may innocently stumble into a tragedy. Such an employee must be paid for all working hours, even if the employer has not asked or wanted the employee to work such additional hours. If a worker does not receive adequate overtime pay, the FLSA will trigger a nightmare for an employer by measuring liquidated damages. Next, a successful FLSA victim is entitled to the payment of all attorney’s fees paid in the successful prosecution of the lawsuit. These fees are assessed for the level of expertise of the lawyer on an hourly basis and may also be raised based on the level of complexity of the case. Lastly, when the employee is deemed owed overtime pay, FLSA calculates damages which usually leads to disadvantages for the employer; during this process, an employer suffers a huge financial loss.

Perspective

Looking back on wage and hours laws, I have previously been in a situation where my former operator in which he had a strong stance on his wage laws. I had always been curious about why he had his minimum wage in the way he had it, so I decided to find out why. My former operator and I are still in contact, so I contacted him about his thoughts on a living wage, minimum wage, and why he was running his store in this manner. This was some of the conversation topics that were talked about and the results of my questionnaire. My former operator made his commitment to making his business pay a living wage. In his efforts, he wanted other business owners to do the same without being forced. He later outlined his four reasons to defend his point. First, my former operator began speaking about slowing people’s motivation to perform. If one of his employees were given a very desirable wage, why should he/she push to perform higher? Secondly, he points out that not every business owner is making millions. To assume that is irresponsible. He knows business owners will work their “butts off” just to keep the doors open. A higher minimum wage would be the nail in the coffin for their businesses. Thirdly, a business owner should not be responsible for how responsible or irresponsibly his/her team lives their life. In a way, forcing them to a certain wage is forcing the employers to pay for luxury items. Lastly, he sees himself as a firm believer in earning your way. During his adolescent years, he began his career at minimum wage and feels that he was underpaid for his first decade of working. Although, his time as a fry cook was rough and he later learns how to budget himself, be responsible, and carry on without some non-necessities. From my former operator’s perspective, it is not just as simple as changing the wage. It’s about educating people on how to handle their finances and responsibilities. Raising wages without education will lead people to continue living paycheck to paycheck.

Impact on The Lone Star State

According to a UT professor, Texas will lose over a hundred thousand jobs if the minimum wage increases to $15 an hour. Texas residents would see an exponential 51.6 percent increase from their current wage of $7.25. From the UT professor’s perspective, you have a trade-off like everything in life. Some jobs are going to be lost. There will be pay raises for some people. You must choose what you want. The world reminded us that many low-wage folks are not the heads of households. Most of the folks are secondary or tertiary workers under the roof of someone else, such as teenagers. As of July 2019, Texas currently holds six percent of the national employment. According to the Congressional Budget Office report, millions of workers will see their wage increase while over a million people would lose their jobs by the year 2025. Under Title VII of the 1964 Federal Civil Rights Act, workers are not allowed to make employment decisions based on race, gender, ethnicity, sex (including pregnancy), and national origin. Additional federal laws prohibit discrimination based on age, genetic information, or impairment (if the worker is at least 40 years of age). Such laws apply to companies with at least 15 workers (for age discrimination, employers with at least 20 employees should comply with the law). Employers can not discriminate from job listings, evaluations, or hiring decisions for advancement, incentives, wages, training, unemployment, or dismissal in any aspect of the employment relationship. This ties into pay equity and how women are tied into genetic information, this includes gender, so if someone is being paid in a different manner due to their gender, it is prohibited. One thing that does get in the way of this, is, if I were a Latina woman, working for a big national company, and if I was being discriminated against due to my race, knowing that someone else does the same job I do but is getting paid more, it would definitely be hard to prove myself to the company, because they can simply say that the other employee simply has more skill than I. A company can come up with such excuses and will follow along with them just to not get convicted. This simple issue can ruin a company’s reputation which is wanted to be ignored by the big company by simply having an excuse until the matter is finished. Now, once the matter is finished, and usually from what is seen, and still, because we continue to have this issue in the world, the employee who has complained about being paid unfairly is usually fired or they have quit. Now, it is illegal to fire someone under these circumstances, due to Title VII, but employers will find little thing to fire such an employee, to possibly save their reputation from any situation like this before. I know this from personal experience, due to the fact that an employee had been complaining to management about many things, and because she was a new employee, it already seemed like we were already having issues. Management ended up firing her for another small issue. So, we know it happens, many people have witnessed these situations, and it absolutely needs to stop. If we don’t corporate with each other, we will never have equality.

References

Andrew Aitken & Peter Dolton & Rebecca Riley, 2019. ‘The Impact of the Introduction of the National Living Wage on Employment, Hours and Wages,’ National Institute of Economic and Social Research (NIESR) Discussion Papers 501.
Carr SC, Haar J, Hodgetts D, Arrowsmith J, Parker J, Young-Hauser A, Alefaio-Tuglia S, Jones H. An Employee’s Living Wage and Their Quality of Work Life: How Important Are Household Size and Household Income? J Sustain Res. 2019;1:e190007.
Gindling, T. Does increasing the minimum wage reduce poverty in developing countries? IZA World of Labor 2018: 30 doi: 10.15185/izawol.30.v2
Murphy, T., & Zheng, H. (2016). What is the definition of gender pay equity? Retrieved [insert date] from Cornell University, ILR School site: http://digitalcommons.ilr.cornell.edu/student/132
Calvasina, G. E., Calvasina, R. V., & Calvasina, E. J. (2010). COMPLYING WITH THE FAIR LABOR STANDARDS ACT (FLSA): A CONTINUING LEGAL CHALLENGE FOR EMPLOYERS. Journal of Legal, Ethical and Regulatory Issues, 13(1), 39-52. Retrieved from http://uiwtx.idm.oclc.org/login?url=https://search-proquest-com.uiwtx.idm.oclc.org/docview/747986249?accountid=7139
Guerin, L. (n.d.). Texas Employment Law Basics. Retrieved from https://www.lawyers.com/legal-info/research/texas/employment-law-in-texas.html
Prazan, P. (2019, July 12). How raising the minimum wage to $15/hour would impact Texas. Retrieved from https://www.kxan.com/news/local/how-raising-the-minimum-wage-to-15-hour-would-impact-texas/.

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