I need to create an annotated bibliography for a research essay I am doing for my term final. How would I cite this study correctly in MLA format?
I do not need help with the abstract or anything, I just cannot find the correct way to site this specific resource.
The federal government has imposed a mini-
mum wage since 1938, and nearly all the states
impose their own minimum wages. These laws
prevent employers from paying wages below a
mandated level. While the aim is to help work-
ers, decades of economic research show that
minimum wages usually end up harming work-
ers and the broader economy. Minimum wages
particularly stifle job opportunities for low-skill
workers, youth, and minorities, which are the
groups that policymakers are often trying to
help with these policies.
There is no ?free lunch? when the government
mandates a minimum wage. If the government re-
quires that certain workers be paid higher wages,
then businesses make adjustments to pay for the
added costs, such as reducing hiring, cutting em-
ployee work hours, reducing benefits, and charg-
ing higher prices. Some policymakers may believe
that companies simply absorb the costs of mini-
mum wage increases through reduced profits, but
that?s rarely the case. Instead, businesses rationally
respond to such mandates by cutting employment
and making other decisions to maintain their net
earnings. These behavioral responses usually off-
set the positive labor market results that policy-
makers are hoping for.
This study reviews the economic models used
to understand minimum wage laws and exam-
ines the empirical evidence. It describes why
most of the academic evidence points to nega-
tive effects from minimum wages, and discusses
why some studies may produce seemingly posi-
Some federal and state policymakers are cur-
rently considering increases in minimum wages,
but such policy changes would be particularly
damaging in today?s sluggish economy. Instead,
federal and state governments should focus on
policies that generate faster economic growth,
which would generate rising wages and more op-
portunities for all workers.
The Negative Effects of Minimum Wage Laws
by Mark Wilson
June 21, 2012
Mark Wilson is a former deputy assistant secretary of the U.S. Department of Labor. He currently heads Applied
Economic Strategies, LLC, and has more than 25 years of experience researching labor force economic issues.
View the Answer
At $7.25 per hour,
wage today in
real dollars is 85
than the original
The federal minimum wage originated in
the Fair Labor Standards Act (FLSA) signed
by President Franklin Roosevelt on June 25,
1938. The law established a minimum wage
of 25 cents per hour for all employees who
produced products shipped in interstate com-
merce. That wage is equivalent to $4.04 in to-
day?s purchasing power.
Originally, the FLSA covered only about 38
percent of the labor force, mostly in the manu-
facturing, mining, and transportation indus-
Over the years, Congress has signifi-
cantly expanded the coverage and increased
the minimum wage rate. The air transport
industry was added in 1947, followed by re-
tail trade in 1961. The construction industry,
public schools, farms, laundries, and nursing
homes were added in 1966, and coverage was
extended to state and local government em-
ployees in 1974. Currently, the FLSA covers
about 85 percent of the labor force.
Since 1938 the federal minimum wage
has been raised 22 times. From 1949 to 1968
the real value of the minimum wage (in 2011
dollars) rose rapidly from $3.78 to $10.34, as
shown in Figure 1. At $7.25 per hour, the mini-
mum wage today in real dollars is 85 percent
greater than the original benchmark, and just
below its average for the past 60 years of $7.59.
Since the 1970s, the federal minimum wage
has fluctuated around roughly 40 percent of
the average private sector hourly wage.
The FLSA requires employers to comply with
state minimum wage laws that may set a state
minimum wage rate higher than the federal rate.
Currently, 45 states and the District of Colum-
bia have their own minimum wages, of which 18
are higher than the current federal minimum of
$7.25 per hour.
Only five states do not have their
own minimum wage laws and rely on the FLSA.
Moreover, even state minimum wages that are
below the federal minimum often have an effect
because they can apply to employers or workers
who are exempt from the federal statute.
Source: Author, based on U.S. Bureau of Labor Statistics data.
Real Federal Minimum Wage
Real 2011 Dollars
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