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The Effects of the Low Minimum Wage in Louisiana

Sidnae Thomas

English 4 Mrs. Jones March 26, 2014

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Outline THESIS: The Louisiana state minimum wage is very low in comparison to most U.S. states, and based on the laws and case studies shown, Obama, along with some other Louisiana legislators are working to up the price. 1. Statistics A. Minimum wage intro/ Louisiana living in poverty B. First being put into act C. Purpose 2. 2. Louisiana minimum wage laws 3. Families living with minimum wage income A. Household salary B. Cost (livable) C. Minimum wage's rate history/ Previous wage 4. Legislators concern A. Obamas view B. Struggling businesses 5. Minimum wages next price A. Small businesses B. Opponents 6. Employees being overworked A. Underpaid Workers

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7. State of the Union Speech A. Minimum wage being a big deal B. Marches and Rallies C. Case Studies 8. Majority of minimum wage A. Retired and teenagers B. The reasons for the target

9. Stereotypes A. Lower wages B. Years of experience but same pay C. Excuses 10. Conclusion A. Restate topic and main ideas B. Thesis

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The Effects of the Low Minimum Wage in Louisiana

Louisiana is the second highest state in the United States that is living below poverty (Poverty Rate Stuck). The current federal minimum wage in Louisiana is $7.25. The first

Federal Minimum Wage of $.25 was signed into law on October 24, 1938 by President Franklin Roosevelt during the Great Depression. Its purpose was to keep American workers out of poverty, and increase consumer purchasing power, in order to stimulate the economy. The Louisiana state minimum wage is very low in comparison to most U.S. states, and based on the laws and case studies shown, Obama, along with some other Louisiana legislators are working to up the price. Louisiana is one of four states that do not have a state minimum wage law, but all employers are still required to pay the state minimum wage, or the federal minimum wage, whichever is higher. The median household salary in Louisiana is $44,673.00, which makes a family of three that is earning minimum wage salarys income an average of $15,080(United States Census Bureau). This is more than $30,000 a year less than the average

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households income.

These numbers in some instances are The cost of living in Louisiana is 16.5%

impossible to believe.

lower than the national average. This would make it more affordable for families, than in some of the higher states. The minimum wage rate was raised in July 2009 from $6.55 to its current rate of $7.25 (US Department of Labor). This low rate has been a concern of legislators, and it has been the talk on the floor of legislation for almost the entire past decade. President Obama and other Louisiana legislators that are in favor of the raise in minimum wage have been trying to push opponents to pass a bill that would increase the minimum wages. With passing this bill the minimum wage will increase from $7.25 to $10.10 an hour, Obama said in his State of the Union address. The raise will definitely have both positive as well as negative effects on both Louisianas households and businesses. One of the positive aspects would be that some workers will be able to afford a better quality of life. One of the negative

effects would be that employers would have to pay out more money on salaries, than what they are used to. That can eventually cause their business to struggle financial, and may go out of business. Although most people say keeping minimum wage at $7.25 an hour is silly, others such as Mr. Michael Lawrence, a

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republican opponent of the rise in minimum wage, thinks that it is a brilliant idea because when people make more, they have more disposable income. And they spend it, which furthers the economic recovery. This however, may be true in some cases because a lot of people have the urge to spend most of their money on merchandise when they know they have a lot of money. Some tend to let the money burn a hole in their pocket, and they itch to spend it. In Louisiana, a large number of workers earn minimum wage and some even less. Tipped or tip credit employees have been earning wages that are stuck at $2.13 an hour since 1991 (US Department of Labor). The tips, plus the minimum wage earned is expected to total the minimum wage of $7.25 an hour. If the tips, plus the minimum wage does not add up to federal minimum wage, then the employer must make up the difference, according to the United States Department of Labor. On average, those tipped employees are subject to make $30 a month in tips. According to the Federal Department of Labor, families making minimum wage with three or more members in the household are considered to be living below the poverty level even with the tax relief. The tax relief would help the average family giving them a tax break at the end of the year, depending on their family income for that year.

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President Obamas State of the Union address illustrated perfectly that he is definitely in favor of the Fair Minimum Wage Act of 2013, a bill that was first introduced by Senator Tom Harkin (D-Iowa) and Representative George Miller(DCalifornia). The bill would raise the minimum wage rate in three increments of $.95 an hour over a period of six years until it reaches $10.10 an hour. President Obama believes that Americans should have a decent income and be able to live comfortably and not have to live in poverty. Obama stated that no one who works full-time should be living in poverty. Why is minimum wage just becoming a big deal? a lot of supporters question. A lot of small businesses that are paying their employees more than minimum wage believe that if minimum wage were to be increased, their business will begin to fail, according to The Times Picayune. If minimum wage were to be raised, then they would have to raise their hourly wage. A lot of fast-food workers in the United States rallied together outside of the jobs to demand higher pay. Some workers marched in the streets carrying signs and screaming, Keep your burgers, keep your fries, make our wages super-sized according to the Los Angeles Times. Although they were large in numbers

and drew a lot of attention from the media and congress, there was no change in the minimum rate.

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According to www.cepr.net/documents/publications/minwage3-2012-04.pdf, researchers have discovered, that a large number of minimum wage workers are those whose education level is either, high school, a GED, a high school diploma, or elderly retired. Adults over the age of 20, make up 88 percent of all workers that are at minimum wage salary(Patrick). Reason being is that the targeted workforces are employees that retain a college degree, are highly educated, and very skillful. The retired employees are only working to earn extra income, or just something to do instead of sitting at home. Since these workers make up the majority of the minimum wage workers, employees feel that they will be paid more money, and still only be able to produce mediocre work. Another reason is that employers feel as

though they will not be able to maintain and keep their business by putting out more money and not receiving any higher revenue. Minimum wage employees feel as though they are being underpaid for the work that they are performing. It is common

practice for the employers to give the dirty work to the minimum wage employees. It is also the norm that the minimum It

wage employees get the worse hours and the worse schedule.

seems as though because of their situation, whether fortunate or unfortunate, the minimum wage employee is treated differently from the higher paid employees.

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Minimum wage employees are often stereotyped because they work for lower wages. This is unfortunate, because there

are various reasons why one would work for minimum wages, some good reasons, and some uncontrollable reasons. The reasons why

an employee has not attained a college degree, a high school diploma, or even a GED is totally dependent upon the individual, and their circumstances. However, it is common practice for an employer to see that someone, for some reason is not highly educated, so they immediately set their salary at the minimum wage level (Almost Everything You). Although this same

employee has had years of experience, the employer does not pay them at a higher rate, simply because they do not have the education. This is only an excuse for lots of employers to

simply save on their finances, and pay only minimum wages to their employees. Nevertheless, Economists are still pushing to get from below the poverty belt. Although theres always going to be people on both sides of the fence, Louisiana and the Representatives will eventually increase minimum wage from the looks of all of the different case studies. Whether it is to increase it immediately to $10.10, or gradually over a period of time raise the rate, it can only benefit the economy. In conclusion, economist have called for an increase stating that

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persistent high unemployment is putting a lot of pressure on low wage paying jobs. This will be a long process, and will shake a lot of employees, as wells as employers.

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Work Cited "Band-Aid or real fix?" USA Today 2 Jan. 2014: 07A. U.S. History in Context. Web. 27 Mar. 2014.

Dorfman, Jeffrey. "Almost Everything You Have Been Told About The Minimum Wage Is False." Forbes. Forbes Magazine, 30 Jan. 2014. Web. 26 Mar. 2014.

"Greater New Orleans." NOLA.com. NOLA, 27 Mar. 2014. Web. 26 Mar. 2014.

Jalonick, Clare and Zaldivar, Ricardo. Poverty rate stuck at record 46.5 milllion; Loisiana has 2nd highest rate. WWLTV .Associated Press,18 Sept. 2013. Web. 26. March 2014. <www.wwltv.com/news/poverty-stuck-at-15-percent-record-465million-224222841.html>

"Minimum Wage Laws in the States - Wage and Hour Division (WHD) - U.S. Department of Labor." Minimum Wage Laws in the

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States - Wage and Hour Division (WHD) - U.S. Department of Labor. U.S Department of Labor, 27 Mar. 2014. Web. 25 Mar. 2014. Morial: raise minimum wage $10.10 per hour? Best of New Orleans.com 4 Jun. 2013. Gambit. March 2014 www.bestofneworleans.com/gambit/morial-raise-wage-1010-perhour/content?old=2207739.

ODonoghue, Julia. Louisiana minimum wage bills to be introduced, seeking increases over federal minimum. Times Picayune[New Orleans] 25 February 2014: 37. Print.