“The Lawrence Textile Strike, also known as the Bread and Roses Strike”, prompted the first minimum wage law in the
United States in 1912. Various states followed suit over the next two decades, and in 1938, at the height of the Great
Depression, Congress passed the Fair Labor Standards Act, which created a federal minimum wage (FLSA).The basic
incentive behind the introduction of the Act was to reduce income inequality.A rise in minimum wage acts as a form of
relocation of wealth from higher-income people to lower-income people.
In principle, Congress amends the FLSA on a regular basis to raise the federal minimum wage to levels necessary for
even the lowest-paying workforces in the economy.It also aims to help low-wage workers benefit from overall economywide advances in living standards. However, this has historically not always been the case. In 1968, The Poor People’s
1 Campaign started because of not raising the minimum wage to sufficient levels .
The explicit purpose of the federal minimum wage is to help increase consumer purchasing power which stimulates the
economy and to keep America's workforces out of poverty.However,the law failed to include the automatic cost of living
adjustments and led to inflation eroding the real value of the minimum wage over time.
There is a dire need for legislative action to raise the nation’s wage floor, more so than ever during the COVID-19
pandemic.Unless consumer's purchasing power is increased,it will be difficult to come out of this recession.Further,the
minimum wage is a direct concern for poverty levels and gender / racial inequality.This paper aims to analyze previous
work on the issue and provide further recommendations for the same.