The necessity of a minimum wage based on the cost of living Essay

The necessity of a minimum wage based on the cost of living - Essay Example The current minimum wage set up by the federal government in 2009 is $7.25/hour calculating up to $15, 080 for a full time worker who works 40 hours per week per year round. The federal minimum wage is categorized into non-tipped, tipped and youth. The non-tipped wage rate is higher as compared to the minimum wage rate of tipped workers. The tipped workers make tips over and above their wage therefore their minimum wage is $2.13 that is lower than the above-mentioned non-tipped rate. The youth minimum wage rate entails all the teens i.e. people below the age of 20 years and ranges between the tipped and non-tipped rate of $4.25. The economics of the world is changing posing a question on the feasibility of the minimum wage laws. The increase in inflation, unemployment rates and the economic downturn makes it difficult for the worker to maintain a standard of living that is above the poverty line. The increase in the minimum wage has been in debate over many years now with the economists questioning the viability of the law and the level of the minimum wage. Thus the minimum wage should be parallel to the cost living and as it lacks to support the living standard it should be increased to fill in the gap. Initially, the minimum wage was enacted in 1938 by the US president Franklin Roosevelt in order to protect the workers from the effects of the great depression. The law helped in keeping the workers above the poverty line, thus helping the economic through an increased purchasing power. The United States Department of Labor shows the minimum wage prevailing in all states of America. The economic and political clashes regarding the minimum wage figure has been going on since the inception of the law. The minimum wage prevailing in a state or territory can be either less or more than the federal minimum. For example, the minimum wage rate for Arizona is $7.90 whereas that of Georgia is $5.15 applicable to employers with six or