Chapter 11 Summary

Minimum Wage

Concept:
In the United Sates an organization is required by law to meet a minimum pay level at which the employee receives for compensation. The 1938 Fair Labor Standards Act (FLSA) established the minimum wage to be $6.55 per hour as of July 2008. As of July 2009 the rate jumped to $7.25, which continues the average rate increase to be .70 cents per year to account for inflation. The FLSA does have an exception to the law permitting a “training wage” where organizations may pays under the wage minimum to a individual under the age of 20 for a period of 20 days while the new hire is being trained. Some states set their own minimum over the federal standard but must pay the higher of the two rates. Some states also have a “living wage” where employees are entitled to a raise based on the cost of living in a particular region.

Emotional Hook:
To be a more looked at business, I think it is important for business to pay their employees a little better than the national standard. It shows the employees that the company cares and in return the employee gives a greater effort.

Key Points:
Organizations must pay a minimum wage in order to avoid taking advantage of its workers. This is a major problem in other areas of the world like China and India where businesses pay workers very little to maximize profits.

Facilitative Question:
As an employer would you want to follow a higher standard or pay higher, in hope to attract better and more qualified employees?