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In response to a much needed increase to the Federal Minimum Wage, The Fair Minimum Wage Act of 2007 was passed on May 25, 2007. Since 1996, the federal minimum wage has been set to an overwhelmingly low rate of $ 5.15 an hour. The new minimum wage act is designed to increase the minimum wage in three steps. In September of 2007 it will increase to $ 5.85, then the following September it will increase to $ 6.55. As of September 2009 the minimum wage will increase to $ 7.25. It is necessary to increase the minimum wage over the course of three years in order not to crash small businesses.

Currently, 31% of the American population is paid the minimum wage. A fair working wage is necessary in our society in order to protect workers from being exploited. The current federal minimum wage is set so slow that it is encouraging exploitation of workers. Since 1997 the cost of living has increased by twenty-seven percent, and yet the minimum wage has remained the same. To compound this issue, the typical minimum wage job does not include health insurance nor provide workers the financial resources to afford to purchase their own coverage.
It is the lower income Americans who suffer from the unlivable minimum wage. There are 37 million people who live below the poverty line, in the United States. The poverty line is any single person who makes $9,800 a year or less. After taxes a person working full time and making $5.15 an hour is at the national poverty line. The extremely low minimum wage is keeping approximately 12.6% of our population below the poverty line. Children seem to fall victim even harder to the unlivable wage. It is estimated that 17.6% of children in the United States live in poverty. For a country as rich as ours this is unthinkable and disgusting.
A higher minimum wage has several advantages. There is an increased incentive to work along with a higher standard of living when people are making more money. The economy prospers because there is more money being generated and spent. In addition, the government will inevitably spend less on social welfare systems. It is estimated that 6.4 million children will benefit from their parents increased wages with the Fair Minimum Wage Act of 2007.
Critics who are against a higher minimum wage argue that there will be a reduced demand for workers for fewer available jobs. However, a 1998 study showed that the increase of the minimum wage from the 1996-1997 legislation produced no significant job loss, and the low-wage market performed better than it had in decades. The only identifiable downfall of this policy is a reduced profit margin for business owners. The wealthy business owners will take home a few million less a year.
It is clear that federal minimum wage is vital in protecting the lower class, unskilled American workforce. It is estimated that the cost of living increases between two and three percent each year, yet the minimum wage has remained the same for the past 11 years.

Learn more about this author, Rosanna Webb.
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