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The Impact of Increasing Minimum Wage
Since the United States estabished a minimum wage with the Fair Labor Standards Act in 1938, minimum wage has been a largely discussed item within politics. One thought would be that it should be increased proportionally with regards to inflation in order to maintain the purchasing power of minimum wage. Over the years, the minimum wage has continued to increase slowly. However, this has not always been the case. Due to the recent movement of increasing minimum wage to 15 dollars per hour within larger cities, there is little known information about the impact that will occur with this significant increase. In order to address the impacts of increasing minimum wage, this paper will look at historical, as well as foreign data on minimum wage, unemployment, and the reduction of poverty. The idea of a minimum wage increase would appear to help reduce poverty. However, the actual impact is unknown due to the effects that it will have on unemployment, inflation, and other major factors. Looking at similar situations in other countries, it appears that increasing minimum wage has helped to improve poverty, quality of life, and worker morale.