Minimum Wage and Social Inequality in AmericaLooking at how the minimum wage impacts equality in society.

Why Have a Minimum Wage

• The argument for a minimum wage is that people who work full time should not be in poverty. This combines two concepts:•Minimum Wage: the lowest wage that

may legally be paid for an hour’s work• Living Wage: a wage sufficient to keep a

family out of poverty

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Minimum Wage Increases

• The Federal minimum wage was originally set at 25 cents per hour. • There have been 19 increases.• Until July 2007 it was $5.15 per hour.• To be equal to its 1968 high in inflation-adjusted

terms it would need to be $10.50 per hour in 2007.• In 2014 the minimum wage is $7.25

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Nominal and Real Minimum Wage(1999 dollars)

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Poverty

Poverty• Despite the wealth of resources and opportunities in the

United States, poverty remains a significant social problem.• Sociologists discuss two general types of poverty: absolute

poverty and relative poverty.

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Poverty• Absolute Poverty: A situation where individuals do not have

access to the basic requirements of life – food, shelter, clothing.

• Relative Poverty: A situation where individuals are excluded from being able to take part in what are considered the normal, acceptable standards of living in a society.

Poverty in the United States

• A full 12.5 percent of the population in 2012 were in poverty (more than 37 million people); this is the highest rate among the major industrialized nations.• One-third of these people are working.• Poverty is calculated using a formula from the

1960s, whereby the poverty line is based on an income three times the cost of monthly groceries.

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Gini Index• Gini index measures the degree of inequality in the

distribution of family income in a country. • The more unequal a country's income distribution, the higher

its Gini index.• If income were distributed with perfect equality the index

would be zero; if income were distributed with perfect inequality, the index would be 100.

Conclusion• If the minimum wage had kept pace with inflation since its

inception in 1968, it would now stand at $10.74 per hour.• Income inequality leads to higher levels of poverty and society

hurts as a whole. • Scandinavia is a prime example of what income equality can

do for a society.• Higher education levels, better healthcare, and a stronger

economy.• Above all people cannot survive on $7.25 an hour.

Sources• Schimtt, John . 2013 "Why does the minimum wage have no

discernible effect on employment?." Center for economic and policy research 1(1):1-24. Retrieved from Jstor on May 1, 2014

• Lin, Ken H. 2013 "Financialization and us income inequality, 1970-2008." American journal of sociology 118(5):1284-1329. Retrieved from Jstor on May 1, 2014

• Warren, John R. 2010 "The effect of minimum wage rate son high school completion."Social forces 88(3):1379-1392. Retrieved from Jstor on May 1, 2014

• Sherman, Jennifer . 2013 "Surviving the great recession:growing need and the stigmatized safety net." Social problems 60(4):409-432. Retrieved from Jstor on May 1, 2014