Can a raised salary really help?

On January 10, 2007 the Fair Minimum Wage Act of 2007 was passed by the House of Representatives. This decree will raise the national minimum wage from $5.15 per hour to $7.25. It is aimed to make the lives of the people with the lowest salary in the nation much more comfortable. However, there are many debates that claim that this raise will not benefit and will, instead, worsen the economic situation. Felicita Rivera is a resident of Worcester, MA. With the raise of her pay, she would get obtain about $100 more a month. Yet, her rent is also being raised to $100 more a month. The supporters of this act state that with more money, the workers will obtain a higher standard of living. Simultaneously, opponents of the act declare that with the raise of the salaries, business will have to raise prices as well and employ less people. Still, there are not many that have been layed off because of a raise in the lowest salary. Also, prices tend to elevate at a slow pace and remain accessible by people that receive minimum wage. Economists say that when the effects are added, this increase does result in being beneficial to these people.

This event reminds us of the first try at creating a Minimum Wage as part of the National Industrial Recovery Act introduced by FDR in 1933. Nevertheless, the act was said to be illegal and the wage was removed. Then, it was installed with the Fair Labor Standards Act in 1938. So far it has not caused too many problems.