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The Park Place Economist

Abstract

Modern minimum wage laws can trace their lineage all the way back to the Ordinance of Laborers of 1349, which was decreed by King Edward the Third of England that set a maximum wage for laborers in medieval England. King Edward was forced to this end due to the large portion of his laborers falling ill and perishing from catching the Black Plague. The 1300s were the last time a wage ceiling was needed for this means and ever since then wage regulations have come in the form of wage floors commonly referred to as the minimum wage. The first country to enact a modern national minimum wage was New Zealand in 1894, the United States had its first statutory national minimum wage introduced in 1938 (Richard, 2016). The minimum wage in the United States has been one of the most hotly debated topics of the last presidential election and for years before that as well. Minimum wage in the United States has been debated in nearly every congressional session, often with no resolution. In 2007, the federal minimum wage was raised to $5.85 an hour; prior to this increase, the minimum wage had not changed since 1997. During that time, the cost of goods had increased by nearly 23 percent, while housing and higher education costs went up even more significantly (Richard, 2016). Raising of the minimum wage is believed to have one main negative cause and that is to increase the level of unemployment of the economy. The issue surrounding raising the minimum wage is not regarding whether the higher wage will increase unemployment but, however, on whether or not the benefits felt by the economy outweigh the costs incurred by the decreased employment.

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