Why We Should Raise the National Minimum Wage

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INTERACTIONS

Obama’s 2013 State of the Union addressed a lurking issue in today’s post-recession America: raising the minimum wage to $10.10 by 2015. This sentiment is echoed by 73 percent of the electorate.

The Fair Minimum Wage Act of 2013 seeks to account for Congress’ failure to raise the minimum wage in accordance with inflation and the heightened cost of living over the past decades.

 

The bill was introduced by Senator Tom Harkin (D-IA), chair of the Senate Health, Education, Labor and Pensions Committee, and Representative George Miller (D-CA), and has spurred support from other representatives as well.

Raising the minimum wage has a bipartisan appeal to it, as the new deal would benefit mostly middle-class workers and has an almost universal tone of common sense: to pull people out of poverty, we should pay them more and give more value to their work.

Disagree? Tell us why.

Here are some advantages to raising the national minimum wage:

It would make life easier for 30 million Americans

Raisetheminimumwage.com states that under the new act, more than 30 million Americans would receive a raise. 43 percent of these workers have some college education and could use the extra money to pay loans off faster.

The raise would also benefit 17 million children whose parents work for minimum wage. Perhaps most significantly, the raise could usher in a new era of women’s equality of pay as 71 percent of these workers are women working in jobs that rely on tips.

Minimum wage increases do not reduce employment

The topic of wage increases in relation to employment statistics has been one of the most contentious and debated issues in economics for years. The Center for Economic and Policy Research (CEPR) conducted an analysis this year that concluded that there is no effect on employment from raising the minimum wage.

This comes from meta-studies (studies of studies) pertaining to 64 studies of the effects the minimum wage has on employment. To put it briefly, these meta-studies that showed a correlation between wage increase and job loss were “less precise” than studies that show little to no correlation:

“Two scenarios are consistent with this empirical research record. First, minimum wages may simply have no effect on employment… Second, minimum-wage effects might exist, but they may be too difficult to detect and/or are very small.”

Below is a graph charting the many studies that were deemed to be insufficient in their preciseness crowded at the bottom of the uncertainty axis. If anything, it shows that one should not always believe what is read, even if the document itself is peer-reviewed.

Doucouliagos-Chart

Wage increases would increase consumer confidence and generate more economic activity

The National Employment Law Project (NELP) provided statistics that should ease the trepidation held by opponents of the bill:

  • Consumer spending accounts for 70 percent of U.S. economic activity but remains tepid because consumers just don’t have the money to spend. Wages and salaries now make up the lowest share of national income since 1966, while corporate profits are now the largest share of national income since 1950.
  • Raising the minimum wage boosts consumer demand, as low-income workers spend their higher wages at local businesses.
  • The Fair Minimum Wage Act of 2013 would generate more than $32 billion in new economic activity, translating to 140,000 new full-time jobs as higher sales lead businesses to hire more employees, according to estimates by the Economic Policy Institute.

 

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  1. salpoo Raising the minimum wage would not help workers in the long run when the price of everything increases.  It would drastically hurt the retired people, unemployed people, college kids, etc., because the price of everything would increase.
  2. ChadGuadagno Not everyone has a family.
  3. davidfordhere Minimum wage should be abolished!  It is not right to threaten people with violence who want to offer jobs even if the wages are low.  The minimum wage reduces the number of jobs available. It hurts the unskilled, the poor, and the young most because they can not get entry level jobs.  see: http://www.learnliberty.org/videos/does-minimum-wage-hurt-workers or http://www.youtube.com/watch?v=siW0YAAfX6I for reference.
  4. Jim Arnold Has it worked in the past? We should learn from that.
  5. Ligoc Cogil I think it's a bad idea, because if someone really wants to work they should have the opportunity to go out there and work for 5$ an hour. 5$ an hour is still more than 0$ an hour so why are we going to deny them the oppritunity. Likewise if you have a family of 3, a mother and 2 teenage kids. If the adult makes 20$ an hour and the 2 teens make 5$ an hour that's 30$ an hour. That should be enough to support a family. Which is another thing these articles don't mention is how families/communities could pool their minimum wages and live very very comfortably. If you had a hour of 10 teenagers making 7$ an hour working at mcdonalds they will easily be able to pay their rent,get to work, feed themselves, and have community property(such as x-boxes swimming pools etc) And just because Consumer spending accounts for 70 percent of U.S. economic activity... What are consumers spending on is not explained. If they are spending their money on ipods and then asking for money for food.... i have no sympathy. But if they spend all their money on food and have nothing left i don't see the problem. Minimum wage is there to keep people fed,clothed, and housed. If you want luxury items WORK FOR THEM get a second job if you have to. That way they will work so much they wont have time for their ipods.
  6. Ligoc Cogil I think it's a bad idea, because if someone really wants to work they should have the opportunity to go out there and work for 5$ an hour. 5$ an hour is still more than 0$ an hour so why are we going to deny them the oppritunity. Likewise if you have a family of 3, a mother and 2 teenage kids. If the adult makes 20$ an hour and the 2 teens make 5$ an hour that's 30$ an hour. That should be enough to support a family. Which is another thing these articles don't mention is how families/communities could pool their minimum wages and live very very comfortably. If you had a hour of 10 teenagers making 7$ an hour working at mcdonalds they will easily be able to pay their rent,get to work, feed themselves, and have community property(such as x-boxes swimming pools etc) And just because Consumer spending accounts for 70 percent of U.S. economic activity... What are consumers spending on is not explained. If they are spending their money on ipods and then asking for money for food.... i have no sympathy. But if they spend all their money on food and have nothing left i don't see the problem. Minimum wage is there to keep people fed,clothed, and housed. If you want luxury items WORK FOR THEM get a second job if you have to. That way they will work so much they wont have time for their ipods.
  7. Ligoc Cogil They could hire 2 people for 5$ and give 2 peoples jobs or hire 1 person for 10$ and leave another person starving. Why not work on lowering costs of goods so people with out jobs can afford them AND people with jobs can buy luxury items. Prime example would be text books. Have a look at how much other countries pay for textbooks it's a fraction of the cost american students pay FOR THE SAME BOOK! but since most college students get assistance from the goverment they don't complain. Yet we as tax payers have to pay the inflated price.
  8. Michael Anderson Minimum wage was deemed unconstitutional the first couple of times it was established. It was only found constitutional when FDR threatened to pack the Supreme Court in 1941. http://en.m.wikipedia.org/wiki/Minimum_wage_in_the_United_States
  9. Michael Anderson Minimum wage was deemed unconstitutional the first couple of times it was established. It was only found constitutional when FDR threatened to pack the Supreme Court in 1941. http://en.m.wikipedia.org/wiki/Minimum_wage_in_the_United_States
  10. Pen Hull Kevin you missed what I was saying by a mile
114 comments
salpoo
salpoo

Raising the minimum wage would not help workers in the long run when the price of everything increases.  It would drastically hurt the retired people, unemployed people, college kids, etc., because the price of everything would increase.

Jim Arnold
Jim Arnold

Has it worked in the past? We should learn from that.

Ligoc Cogil
Ligoc Cogil

I think it's a bad idea, because if someone really wants to work they should have the opportunity to go out there and work for 5$ an hour. 5$ an hour is still more than 0$ an hour so why are we going to deny them the oppritunity. Likewise if you have a family of 3, a mother and 2 teenage kids. If the adult makes 20$ an hour and the 2 teens make 5$ an hour that's 30$ an hour. That should be enough to support a family. Which is another thing these articles don't mention is how families/communities could pool their minimum wages and live very very comfortably. If you had a hour of 10 teenagers making 7$ an hour working at mcdonalds they will easily be able to pay their rent,get to work, feed themselves, and have community property(such as x-boxes swimming pools etc) And just because Consumer spending accounts for 70 percent of U.S. economic activity... What are consumers spending on is not explained. If they are spending their money on ipods and then asking for money for food.... i have no sympathy. But if they spend all their money on food and have nothing left i don't see the problem. Minimum wage is there to keep people fed,clothed, and housed. If you want luxury items WORK FOR THEM get a second job if you have to. That way they will work so much they wont have time for their ipods.

Ligoc Cogil
Ligoc Cogil

They could hire 2 people for 5$ and give 2 peoples jobs or hire 1 person for 10$ and leave another person starving. Why not work on lowering costs of goods so people with out jobs can afford them AND people with jobs can buy luxury items. Prime example would be text books. Have a look at how much other countries pay for textbooks it's a fraction of the cost american students pay FOR THE SAME BOOK! but since most college students get assistance from the goverment they don't complain. Yet we as tax payers have to pay the inflated price.

Pen Hull
Pen Hull

Kevin you missed what I was saying by a mile

Steven Andresen
Steven Andresen

Minimal skilled labor and low entry skilled positions will be reduced to minimum wage jobs. Why go to a trade school for a job that pays the same as a burger flipper at the local Booger Burger fast food chain!

It will take a couple of years for the low skilled wages to rise, which will force all the rest to rise in turn. Causing a avalanche of other jobs that will have to adjust for forced inflation.

Priscilla Preciado
Priscilla Preciado

I know you dont have any knowledge of small business. I have 15 employees that will lose thier jobs over this. I can not afford to pay payroll taxes and insurance if it goes up. Right now everyone would rather keep thier jobs than get another raise.

Paul Kilmartin
Paul Kilmartin

One implies the other. Wall street is in the government because the government is in wall street. So I'm all in.

Steve Stratton
Steve Stratton

NELP - main backers are AFL-CIO and various individual labor unions & law firms! Not exactly an unbiased report. Graph showing decline in value of minimum wage based on 2012 dollars is a perfect example of skewing data to show the results you want to report. Almost everything has declined in value if you base it on present dollars.

Stephanie McAtee
Stephanie McAtee

Then people have the right not to work for low-paying private industry, just as much as they have a right to survive and exist.

Stephanie McAtee
Stephanie McAtee

And while we're at it, get Wall Street out of the government, and government out of Wall Street....I'd say get Wall Street out of the economy but I'm afraid that might not work....

Stephanie McAtee
Stephanie McAtee

Because the people on the bottom won't have to work 3 jobs to make ends meet, won't be in perpetual debt, or would be able to live a somewhat normal life, which apparently terrifies the middle class or better off people in this world.

Stephanie McAtee
Stephanie McAtee

All I read was "I am scared of the unskilled worker and I don't want them to be able to survive! They need to get 3 and 4 jobs and be completely miserable to be on the same level as a normal worker!" Wage-slave still = slave.

Stephanie McAtee
Stephanie McAtee

Too bad for us that the people at the top won't because they are too busy manipulating it for their own gain, eh?

Tim Daniel
Tim Daniel

Increasing the minimum wage actually increases unemployment (especially among young workers, the poor, etc.); our entire government is run on bad policy and the related unintended consequences, therefore why not increase it? How about we just go for the gold and raise it to $50 per hour?

Eric Roth
Eric Roth

Kevin C Smith sure taught us all a lesson by replying conversely to everyone that knows what really happens when you raise minimum wage. He taught us that some people are incapable of critical thought, him included.

Arvis Kraetsch
Arvis Kraetsch

Why raise it .They won't work anyhow. TOO many freeloaders

Steve Stratton
Steve Stratton

Federal minimum wage is just that a mandated minimum, companies are free to pay workers more than that and states can set a higher minimum wage which many states and cities do. In fact the minimum wage in San Francisco is $10/hr and yes that includes restaurant workers.

Laura B Piedad
Laura B Piedad

I would add that a minimum wage job was never meant as a career job, only a start for those entering the work force to gain skills and experience, however I see that Kevin Smith knows EVERYTHING about business and the minimum wage. Looks like another out of work Kool-Aid drinker with too much time on his hands.

Al Chaney
Al Chaney

Under Obamacare there will be losts of Part Time job very little Full time jobs.

Stephen Bone
Stephen Bone

Who defines what is faulty and what is precise? And generates jobs for whom? Black teenage dropouts or White college bound prepsters?

Steve Schlichter
Steve Schlichter

It is a tired argument. economic activity is not the same thing as creating wealth.

Paul Kilmartin
Paul Kilmartin

Minimum wages don't contribute to unemployment? Really? Why not raise them to $500? Don't be naive. The only way raising minimum wages don't contribute to unemployment is if they were going to need to be raised on their own, as a market response, to the continued debasement of the currency by the those who continue to agitate for more top-down control. Free the people. Get the government out of the economy.

Nima Faanunu
Nima Faanunu

race warfare (check)... class warfare (dead ahead). Can we stop being socialist and be americans?

Nima Faanunu
Nima Faanunu

Abolish it... then you'll see a change for the better. i mean who can really live on it? Noone! If you pay teens less, you can pay older people more... think about it.

Kevin C. Smith
Kevin C. Smith

Then wouldn't you be better off taking a pay cut?

Kevin C. Smith
Kevin C. Smith

There are many, many jobs-part time and minimum wage. Many of the others may require skills or education for which people need training or schooling-which they can't afford at prevailing wages. Raising minimum wages makes more sense than simply saying "let them eat cake".

Kevin C. Smith
Kevin C. Smith

Yes, we need revitalized unions to bring the general level of wages, benefits and working conditions to a higher level. But the age of those workers paid minimum wage (half of whom are 25 years or older) is beside the point.

Kevin C. Smith
Kevin C. Smith

It makes sense but you have to think about it first (though, to be fair, not for very long). What is you evidence for the assertion that is has "been proven wrong again and again"? Because experience shows otherwise.

Alan Parkman
Alan Parkman

If you don't make yourself worth $10.10 per hour, then you don't get the job... or you get replaced by someone who is worth it!

Kevin C. Smith
Kevin C. Smith

That assumes that no one now making minimum wage is producing past the break even point now. It also ignores the increased purchasing power and spending from consumers with greater disposable income.

Kevin C. Smith
Kevin C. Smith

Workers will always be paid the minimum amount possible regardless of productivity or quality of work. that is "simple economics". People need a minimum level of income in order to live.

Kevin C. Smith
Kevin C. Smith

Most entry level jobs are held by other than teenagers. Minimum wage was always supposed to provide a minimum standard of living. The age of the person is (and has been) irrelevant.

Kevin C. Smith
Kevin C. Smith

Very little at this point. Raising it as proposed, however, would encourage buying power.

Kevin C. Smith
Kevin C. Smith

Uh, if people could get better jobs, they would. How is your job worth less by getting paid more?

Kevin C. Smith
Kevin C. Smith

The cost of one hour of your labor goes up but, unless the cost of what you produce is 100% labor-nothing else-the price of what you produce goes up less than that. So, the consumer pays less for products than what they are making in additional wages. A very good idea.

Kevin C. Smith
Kevin C. Smith

Small businesses will make it just fine. "THINK!!!!" about customers.

Kevin C. Smith
Kevin C. Smith

I like the deduction for rent to match the mortgage deduction.