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Discuss the pros and cons of the Federal Minimum Wage. Should the Federal

government be allowed to set a minimum wage? Would it be better if individual states set their own minimum wage?



There are surely both pros and cons to Federal Minimum Wage and many who argue for each respective side. First, one pro would be that employees or workers who can cover their specific cost of living have better overall morale. Also, Federal Minimum Wage reduces income inequality and enhances the incentive for people to work rather than being on welfare or universal basic income. Minimum wage also spurs economic growth, as workers have more money to spend which increases all business and revenue, from Amadeo (2019). 

Next, possible cons are also listed in the article by Amadeo such as minimum wage is an unfunded mandate that must be placed on business’ shoulders. Minimum wage laws also raise business labor costs. This consequentially increases the unemployment rate, because companies are reluctant to hire more and more employees due to labor costs. Minimum wage laws also penalize companies that are labor-intensive, as well as increasing job outsourcing. The federal government of course should be allowed to set a minimum wage because they have the holding power of governing the country. However, it may indeed be better if individual states could set their own minimum wage. There is a different cost of living and other aspects in every state that affect what the rate of minimum wage should likely be. State governments could surely successfully handle setting their own individual minimum wage laws.


“Minimum Wage: Definition, History, Pros, Cons, Purpose.” Amamdeo, Kimberly. (2019). Retrieved from:



Federal Minimum Wage (FMW)

The minimum wage is regarded as the least amount of money that any worker can be paid by their employer. For instance, the minimum wage is considered to be $7.25 per hour in the U.S. It is true that when the state minimum wage is greater or higher, then a non-exempt employee must be offered an amount not less than the greater or higher minimum wage. The reason for the federal minimum wage is to ensure that the employees are free from exploitation by their employers.

Pros and Cons of the Federal Minimum Wage


Most of the individuals who are for the federal minimum wage (FMW) are the labor advocates. First, the FMW helps the workers in covering their various cost of living. The wage amounts boost their morale and thereby making the workers become more productive and attain a decent standard of living. Secondly, FMW helps in economic growth. The case is so since the workers are paid enough money which in turn is used to spend and purchase various commodities. Thus, the demand for goods and services is raised and revenue is collected to help in economic development projects. Third, FMW helps in educational investment. Individuals can pay for their schooling programs that result in an educated workforce.


First, the FMW is weighed on the business owners. Business employers are the ones who have a burden placed for the minimum wage amounts and must adhere to the same. Secondly, minimum wage rates increase business labor (Doyle, 2017). The case is true since the federal government requires an effective pay for the workers, hence the business owners are forced to pay more wages for a single worker. As a result, business owners employ fewer workers to level with business labor costs. Third, the FMW penalizes the labor-intensive companies. As a result, capital-intensive companies are the ones rewarded by the minimum wage law.   

Would it be better if individual states set their own minimum wage?

The Federal government should have the mandate to set the minimum wage to be used by employers. If the minimum wage is set by individual states, it would be better. Individual states should be permitted to have their own minimum wage (Dickens, 2015). Different states have different overtime hours and working days or weeks. Some states have fields under the law that necessitates promised commissions or wages within the “The Fair Labor Standards Act of 1938 (FLSA)” while other states do not have such fields in their laws.  


The minimum wage raises the number of employment opportunities in any given economy. Businesses have options to offset increased labor costs. Businesses can either increase the prices of commodities or decrease the employees’ working hours. Consumer spending, productivity and worker morale all increase.


Dickens, R. (2015). How are minimum wages set? IZA World of Labor.

Doyle, A. (2017). Pros and Cons of Raising the Minimum Wage. The Balance», December, 14.