Since its inception due to the passage of the Fair Labor Standards Act of 1938, the minimum wage has been a highly debated topic. Originally set at 25 cents, the minimum wage has grown much larger over time. The Federal minimum wage currently stands at $7.25, unchanged since 2009 (DOL, 2019). Many states, however, have decided to set their own minimum wages, and some are much higher than the minimum Federal level. In this study, we attempt to determine the effect that minimum wage laws at the state and Federal level have had on poverty in the United States.
Arizonans have elected to increase the minimum wage twice since 2006 via ballot measures while lawmakers doubt that increasing the minimum wage positively affects workers. We conclude that a 1% increase in the minimum wage will on average produce a 1.13% increase in per capita income in Arizona. While at the same time, a 1% increase in the unemployment rate will produce a 5.1% decrease in per capita income and a 1% increase in the inflation rate will produce a 3.7% decrease in per capita income.
Since 2012 and the start of the Fight for $15 Movement began, minimum wage has been a hotly debated topic. Many people argue that raising the minimum wage will provide much needed income increases for millions of Americans. Others argue that minimum wage increases cause inflation and job loss.