On Both Sides of the Line..

The structure of minimum wage law in this nation is at a place where Adam Smith can stand with his feet on two different sides of a line. Smith would support the United States federal minimum wage as it prevents the exploitation of workers; minimum wage being the lowest wage at which workers may sell their labor. However, he would be severely disappointed with the current rate of this nation’s minimum wage as countless families struggle to survive on minimal earnings. As economic theory suggests, in technicality, the raising of minimum wage helps workers whose wages are raised, and hurts people who are not hired (or lose their jobs) because companies cut back on employment. Considering this theory, Smith would stand in general support of the minimum wage laws of our nation; however the cost of living in the States throws that belief into question. The basis on which Smith establishes his argument, as written in the Wealth of Nations, is that “a man must always live by his work, and his wages must at least be sufficient to maintain him.” This includes the funds necessary for a man to bring up his family. Yet in the United States, federal minimum wage is not enough to sustain a man, much less his wife and children. The federal minimum wage in the United States is $6.55 per hour, with an increase to finish at $7.25 by July 24, 2009, and those funds, though minimally increasing, are not sufficient for the sustenance of families in this nation. It is unfortunate that in today’s economy an individual cannot support themselves on a mere six dollars and fifty-five cents an hour, much less sufficiently care for their family. Consequently countless families living off minimum wage are facing poverty. While Smith would in theory support the idea behind minimum wage laws and their original intention, he would be greatly displeased with the current minimum wage rates of our nation as many people struggle to earn what is “sufficient to maintain [them].”