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Critics of Federal Minimum Wage Law

June 10th, 2007 Posted by Mark

There are some critics of the new federal minimum wage bill who we have already talked about. Those are the folks who say—and remember, I am not agreeing with them, I am just repeating what they have said themselves—that the new federal minimum wage will hurt the smaller employers in the country, and lead to them being able to hire less workers and even have to release some of their workers due to the increased pay roll they will have.

These critics also say that the current federal minimum wage law, which was worked on and compromised over throughout the last few months by Republicans and Democrats in the House and the Senate, does not provide enough tax breaks for smaller employers. The final tally on the tax breaks was about $4.8 billion in the federal minimum wage law package, but originally, the Senate has as many as $8 or more billion in tax breaks in their version of the bill.

But there are also critics on the other side of the debate who say—and again, I am not taking sides, just repeating both sides of the argument—that the federal minimum wage law does not go far enough in providing money for the poorer workers in the country. I bring it up because a new report out of the Employment Policies Institute, a so called think tank out of Washington DC, released their report on the federal minimum wage—called “Minimum wage hike is an empty promise for low income families.” From the title of the report you can see what side of the argument they take.

They say that every 10 percent increase in the federal minimum wage leads to as much as a 3 percent increase in unemployment. However, another think tank type organization, the Poverty Institute in Rhode Island, has said that the federal minimum wage would need to be as high as $14.76 per hour to make it useful for a single parent with two children to live on and not be in poverty.