Running head: FEDERAL GOVERNMENT ROLE ON MINIMUM WAGE 1

Federal Government Role on Minimum Wage

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FEDERAL GOVERNMENT ROLE ON MINIMUM WAGE 2

In the journal “Better than Raising the Minimum Wage,” Buffet makes a normative

judgment concerning the policy that he believes is the best in reducing poverty and helping

people achieve a decent lifestyle. He argues that the economic policies of the United States

should be reviewed and designed in a way that they provide enough income for working

individuals to live a decent lifestyle. The journal suggests that the central government should

supplement the Earned Income Tax Credit (EITC) to facilitate the expansion of minimum wage

which will consequently promote the realization of workers’ decent lifestyle (Buffett, 2015). The

message from the journal is right as the federal government holds the capacity to control policies

which affect the minimum wage of workers.

The federal government can benefit workers especially the small business owners by

setting a minimum wage which increases with inflation. The small business owners provide job

opportunities to many citizens in the US at a minimum wage. Therefore, federal government

setting policies that expand minimum wages would enable employers to plan accordingly for

small yearly salary increases. The federal government sets the standard minimum wage that

applies to all workers in the US. For instance, the US Congress passed the Fair Labor Standards

Act in 2009 (Toggl, 2018). The act established a wage of at least $7.25 per hour for non-tipped

personnel and $2.13 per hour for tipped personnel (Toggl, 2018). Congress passes such policies

that enables expansion of minimum wage while preventing a decrease of the jobs available in the

state. Such instances prove that the federal government is in control of ensuring that workers

have enough income to lead a decent life.

The CBO states that raising the minimum wage to $10.10 would guarantee 900,000

workers a safe way out of poverty (Toggl, 2018). The increment of the minimum wage by

lawmakers raises the income of most households. However, this increment would result in a
FEDERAL GOVERNMENT ROLE ON MINIMUM WAGE 3

decrease in the real-time income of families that experience six times the rate of poverty in the

US. The federal government thus has several policies in place to control income inequality and

help workers especially the low-income families. One of the most significant systems that checks

income inequality is the progressive income tax. The policy places higher tax rates on people

with higher incomes (Toggl, 2018). All citizens in the US receive similar essential federal

services, but the wealthier ones have to pay more for the services. The progressive income tax is

thus an instance of the role that the federal government plays in ensuring that workers especially

the low-income workers have a decent lifestyle by being subjects to more affordable taxes.

Buffet’s statement is a decisive economic question whose answer depends on the values

of the person answering it. Through the passing of legislature, the government can control the

minimum wage that workers receive and assist the majority of them in living above the poverty

line. According to the instances discussed above, it is correct to state that Buffet is right as it is

only the government that can ensure the working class leads a decent lifestyle by providing

adequate remuneration.
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References

Buffett, W. (2015). Better Than Raising the Minimum Wage. Wall Street Journal.

Toggl (2018). Pros and Cons of Raising Minimum Wage. Retrieved from

https://toggl.com/pros-and-cons-of-raising-minimum-wage/