Thursday, July 18, 2013

The U.S. Workforce and the Federal Minimum Wage Increase

For 32 years, KRA Corporation has provided both management consulting and program operations services in the “education, employment, and training” milieu.  In accomplishing our mission of developing workers and strengthening communities, the KRA team has created and implemented innovative workforce development programs across the country in support of Federal, State, and local agencies who remain committed to improving the lives of individuals through employment.

The sad fact, however, is that sometimes having a job simply isn’t enough. The annual income of a U.S. full-time worker employed at the current minimum wage of $7.25 per hour is $14,500—which translates to many families living below the poverty line.

A situation that prompted KRA Corporation to salute President Obama’s recent State of the Union address, wherein he called on Congress, to increase the Federal minimum wage from its current rate sub-$8 per hour rate to $9.00 per hour.

The additional provision that seeks to index the minimum wage to inflation on a permanent basis is equally as important as this proposed wage hike itself. Even as the cost-of-living continually rises, re-indexing is something that previous increases have failed to account for.

The Fair Labor Standards Act set up the provision for the Federal minimum wage in 1938. Since then, it has seen 22 raises. This raise, if ratified by Congress, is estimated to impact 15 million low-income workers. KRA has long been an advocate of improving the conditions for workforce development, and as such, we applaud legislation that mirrors our ethos.

A satisfied worker is the basis for a better working environment. It is something that Acting Secratary of Labor reflect on in the official blog of the U.S. Department of Labor, Work in Progress. He posits that increased wages will positively affect morale, stabilize the workforce, and reduce turnover.

Raising the minimum wage and the effects is will have is always grounds for debate. The Department of Labor’s minimum wage website takes a run at addressing what it labels as “myths” that have grown around a minimum wage increase and the effects on—among other things—the economy, businesses, and others’ jobs.

A minimum wage increase helps to make the job market more attractive to those entering it as lower wage structure employees. Economists and corporations (like Costco) have both mentioned the by-product of increased productivity and how it represents a direct benefit to businesses. As this can only benefit both our jobseeker- and business customers, KRA Corporation invites this increase as a complement to the work that we do.

The KRA team values the work done by the Federal government, especially when it targets improving the quality of life for the workforce and as a result, the communities in which we live, and we will continue our mission to mitigate unemployment in the U.S.

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