Final answer:
The minimum wage is the lowest hourly wage that employers are legally allowed to pay their employees. It has gone through several changes since its beginnings in 1938. The real minimum wage has declined in certain periods and the impact on employment levels can vary.
Step-by-step explanation:
The minimum wage is the lowest hourly wage that employers are legally allowed to pay their employees. It is set by the government and is intended to ensure that workers receive a fair and livable wage for their work. In the United States, the minimum wage has gone through several changes since its beginnings in 1938.
An analysis of the minimum wage over time shows that, after adjusting for inflation, the real value of the minimum wage has actually decreased in certain periods. From 1967 to 2010, the minimum wage dropped by more than 30 percent in real terms, even though the nominal figure increased. Increases in the minimum wage between 2008 and 2010 helped mitigate the decline, but since 2010, the real minimum wage has continued to decline.
It is important to note that the impact of the minimum wage on employment levels can vary depending on the specific circumstances. While studies have shown that small increases in the minimum wage have had minimal effects on employment, a significant increase may lead to a greater reduction in employment demand.