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| In what ways would adjusting minimum wage to reflect the cost of living shape society?
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Isabella, ᴛʜᴇ ꜰᴀᴄᴛ-ᴄʜᴇᴄᴋᴇʀ
(last edited Aug 19, 2025 10:58AM)
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May 23, 2025 11:18AM

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The federal minimum wage was put in place after the Great Depression, when many workers were laid off or paid a lot less. President Roosevelt attempted to make several acts, trying to revive the economy by creating ‘fair competition codes’. However, these were denied by the Supreme Court, who claimed they did not have enough power to institute these codes. Eventually he created a bill to set the minimum wage, cap hours, and control child labor.
Now the minimum wage has of course, increased throughout the years, however so has the cost of living.
https://www.epi.org/blog/a-history-of...
Now, the minimum wage on average covers 50% of all living expenses. The minimum wage hasn’t changed since 2009, but inflation has. I think it’s important to add here, that when the minimum wage was created, it was kept to such a low wage with the intention that teens be paid this amount, and adults with proper education be paid much over the minimum wage. Unfortunately, this is not the case, and one of the biggest reasons is that the jobs most teens would have that pay minimum wage are taken by adults who were not able to get their full education, especially college. But the minimum wage can affect this too.
https://www.bill.com/blog/minimum-wag...
https://www.bestcolleges.com/research...-
difference-in-salary/
Changing the minimum wage would technically be best for society, but it also arises issues. When employers raise salaries, they also commonly raise prices. This could influence inflation and create the opposite effect of what raising the minimum wage is trying to do.
However in most cases, if employers insignificantly or didn’t raise prices, it could be beneficial in almost every way. Studies show that the amount of people in poverty will go down, the amount of homeless people will go down, and education rates could go up.
If parents are making enough money to comfortably support them and their children, they are so much more likely to put aside enough money for their children to go to college, or finish their education without having to drop out or stop after college to help out the family.
https://www.cbo.gov/publication/55681