The United States, the minimum wage, is prescribed by the federal, state, and local governments. It is defined as the least amount of money that employers are required to pay their employees per hour. Currently, the federal minimum wage in the US is $7.25 per hour (Amedeo, 2019). States have also set their respective minimum wages. The role of the minimum wage is to ensure that employers do not exploit their workers. On the positive side, the federal minimum wage enhances income equality. It also ensures that the workers can cover their cost of living. By increases demand in the market, the minimum wage can spark economic growth.
On the negative side, the federal minimum wage is not funded, meaning that businesses have to cater to it. The federal minimum wage also raises the labor cost, making it difficult for a business to have sustainability. When the federal government compels employers to pay more, the most likely counterproductive effect is an increased unemployment rate. The federal government should be allowed to set a minimum wage that cuts across the entire country (Meer & West, 2016). The mandate should not be left to the states. First, the federal government has a broader jurisdiction and influences every economic aspect of the country.
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More importantly, each state has a different economic landscape. Some states have better economic viability than others due to the presence of natural resources and better infrastructure. Therefore, states with low economic viability can use this to justify their low minimum wages. Some states might also have better economic conditions but decide to pay its workers a meager minimum wage. It is for this reason that states should not be allowed to determine the minimum wage. The mandate should rest with the federal government to ensure that all states pay workers a decent amount of money for the work done.
References
Amedeo, K. (2019). Minimum Wage with Its Purpose, Pros, Cons, and History. The Balance https://www.thebalance.com/us-minimum-wage-what-it-is-history-and-who-must-comply-3306209
Meer, J., & West, J. (2016). Effects of the minimum wage on employment dynamics. Journal of Human Resources, 51(2), 500-522.
