What is the Federal Minimum Wage in 2011?
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What is the Federal Minimum Wage in 2011?

Federal Minimum Wage in 2011 is set as $7.25. Inflation plays a big role in Minimum Wage.

What's Minimum Wage?

Minimum Wage is the amount set by the government that businesses must adhere to as far as wages for their workers. It was first set to prevent child labor and to make sure workers weren’t underpaid. The first federal minimum wage was introduced during the Great Depression. It was set at $0.25 per hour. Could you imagine getting that paycheck? The minimum wage law still exists today. Minimum Wage is also set up to make sure that you can afford the cost of living. People need to be able to buy the goods they demand, otherwise the economy would collapse. But firms must be able to stay profitable to be able to supply these goods.

The Federal Minimum Wage

The Federal Minimum Wage, as of December 2011, is $7.25. The last time this was raised was in 1997. This was raised from $5.15 to make up for the inflation that had occurred. Before this raise, by the end, people were in an uproar over the fact that it had not been raised recently. As inflation occurs, the cost of living goes up. The Cost of Living is the price that people must pay to have certain necessities in life. The federal government sets an amount that state's have to adhere to. But then state's can raise this minimum wage. For instance, Massachusetts minimum wage is set at $8.00.

The Exceptions to Minimum Wage

Minimum Wage Lowered for Tips

The Minimum Wage applies to all employees, with one exception. The exception is for people that make money through tips. The Minimum Wage for these people can be significantly lower for these types of workers. Some people only make about $3.00, but they make up the difference in tips. It usually equals out to a normal workers pay. The best type of job, for hourly workers, is one that still pays about minimum wage and you can get tips.

Minimum Wage for Young People

Another exception is for people under the age of 20. The Minimum Wage for people under 20 years of age for the first 90 days of employment is $4.25. Once they hit 90 days, or about 3 months, they must be paid over $7.25 like everyone else. 

How is Minimum Wage Increased?

Minimum Wage isn't increased too often actually. The reason for this is that Congress must pass a bill to get it increased. That's why it took until 1997 to adjust it for inflation last time. Someone who had spoken out on raising the minimum wage was Ted Kennedy. He brought the bill up quite a few times and all except the last time got rejected.

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Comments (2)

Very interesting and informative share! This is good to know. Good job here! Thanks for posting this information. Voted

Thank you very much! It's just what I learned in my economics class! Thanks for the vote!

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