How would the compensation system change if the minimum wage provision of the Fair Labor Standards Act of 1938 were repealed
A simple Google search found this:
http://www.dol.gov/compliance/laws/comp-flsa.htm
How do you think the compensation system would change if this act were repealed?
If the minimum wage provision of the Fair Labor Standards Act of 1938 were repealed, it would have a significant impact on the compensation system in the United States. Let's take a look at how it would change:
1. Potential Reduction in Wages: Without a minimum wage, employers would have more flexibility to lower wages as much as they desire. This could lead to reduced earnings for workers and potentially create a race to the bottom, with employers paying the lowest possible wages.
2. Increased Wage Inequality: The absence of a minimum wage could widen the wage gap between low-income workers and high-income earners. Individuals in low-skilled or entry-level positions may face greater difficulty negotiating fair wages, resulting in more income inequality.
3. Economic Impact: Eliminating the minimum wage provision might lead to a decrease in consumer purchasing power. Lower wages for workers could result in reduced discretionary spending, which could negatively affect businesses and overall economic growth.
4. Potential Job Loss: Supporters of the minimum wage repeal argue that businesses could create more jobs if they have lower labor costs. However, it's important to note that removing the minimum wage may not necessarily spur job growth. It could lead to a situation where workers are forced to accept excessively low wages, leading to heightened financial insecurity and a negative impact on living standards.
5. More Reliance on Government Assistance: With lower wages, an increasing number of workers might qualify for government assistance programs. This could place an additional burden on social welfare programs and taxpayers.
To get a more accurate and comprehensive assessment of the potential impact of repealing the minimum wage provision, it would be crucial to consult expert opinions, conduct economic studies, and analyze historical data from countries or regions where such changes have been implemented.