Monday, February 18, 2013

Raising the Federal Minimum Wage is Good for Americans and the Economy

By Dale Bowling

In celebration of Presidents' Day, I thought I would write about one of President Obama's policy initiatives: increasing the federal minimum wage.

Increases to the federal minimum wage are not only the right thing to do morally, but they also create jobs.

I know this is not what you hear from the Marco Rubios or John Boehners of the world, but how can it surprise you by now that they don't know what they're talking about?

The federal minimum wage is $7.25/hr. If you work at that wage for 40hrs/wk you'll bring home $14,500 a year. This puts a lot of hardworking Americans below the poverty line.

It is for this reason that 32 states and the District of Columbia have enacted higher minimum wages than the federal minimum wage, Illinois being one of them. But increases in the federal minimum wage will still lift up millions of workers nationwide.

The fact of the matter is that increasing the minimum wage puts more money in the pockets of the working poor and since they spend by necessity every dime they earn, this money gets cycled very efficiently back into the economy. To use economics terms, more demand stimulates supply.

Don't take my word for it. A study from The Review of Economics and Statistics shows that increases in the minimum wage are not the job killers that Republicans like to say they are. The opposite is true- jobs are created by increases to the minimum wage.

The Economic Policy Institute has argued that raising the federal minimum wage to $9.80 would create over 100,000 jobs.

So why does the GOP like to say that increases to the federal minimum wage kill jobs? Because if they can deny increases to the minimum wage based on a loss of jobs it makes them look like they're out to protect the Little Guy, even though their agenda is really to protect the Big Guy. Big Guys write Big Checks to the GOP, Little Guys don't.

No, I don't think that top Republicans wish the Little Guy any ill. They don't wish him anything. And that's the problem.

This is not just an economic issue or even a labor issue; it's also a gender issue and a family issue. Two-thirds of minimum wage jobs are held by women. And over 60% of these women are either the primary or co-breadwinner for their family. So if a certain party cared about family like they say they do, they'd be all for this increase.

And not only is this an economic issue, a gender issue, a family issue, a labor issue, this is also a fairness issue- and not to whom you think. Why is it that employers aren't paying their workers a wage that allows them to be above the poverty line? Because they can.

If we lived under a totally free market (like Republicans always say they want) workers wouldn't continue at jobs that didn't allow them to pay the bills- even minimally. But employers know that their workers can qualify for federal aid if their employees don't make too much. So in essence, employers are taking advantage of federal programs like food stamps, etc. to avoid paying their employees a living wage. And taxpayers subsidize the shortchanging of American workers.

Nice, huh?

The truth is there's only one party here in America that has the back of the Little Guy and that's the Democratic Party. And we're also the only party that cares a bit about what the facts show to be true.

In the case of increasing the federal minimum wage the right thing to do for human dignity is the right thing to do for economic growth.

What thinking, caring person could not be for that?

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