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From VOA Learning English, this is the Economics Report. Workers says they want to receive a minimum “living” wage that permits them to meet the most basic needs of life such as food, clothing and shelter. Employers say that high labor costs will affect their company’s profitability and its value to shareholders. And governments worry that they will lose trade, investment and tax revenues if labor costs within their borders go too high. In 2014, President Barack Obama raised the U.S. federal minimum hourly wage to $10.10. The order applies only to new or replacement federal contracts. However, for most jobs subject to the federal minimum wage, the rate remains $7.25 an hour. But, the federal minimum wage does not apply to everyone for a number of reasons. Each state has its own labor laws, which can affect the minimum wage workers can receive. In early June, the Los Angeles City Council approved a minimum wage measure. The plan will increase that city’s lowest wage to $15 an hour by 2020. Under the plan, the minimum wage will increase yearly for five years. Small businesses and non-profit organizations will have an extra year to reach the $15-an-hour pay level.
Requiring a high minimum wage for hourly work can have the unwanted effects of driving up youth unemployment. Employers may hire fewer unskilled workers or they may cut labor costs by using equipment such as machines or robots. The main criticism of a high minimum wage is that it can hurt job creation. But it is clear that pay raises do lift the standard of living for the working poor–as long as inflation is not a problem.
