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San Francisco Demonstrates What Happens When We Raise The Minimum Wage

Over the past 15 years, the city of San Francisco has given us evidence of what happens when we raise the pay and benefits of low-wage workers. Is it doom and destruction or the city of Oz?

(Photo Credit: jeffgunn/Flickr)

In the 1990s, San Francisco enacted numerous laws to raise pay, improve benefits, expand healthcare access, and extend paid sick leave for the city's workers. Fifteen years later, the Institute for Research on Labor and Employment says the mandate worked, and those who live and work in San Francisco are enjoying pay and benefits that go against the current national trend.

Sorry to disappoint the all the "job creators" sitting on their piles of wealth, but San Francisco has shown the way to improve the economy is get off your pile of wealth and spread it around. Rather than becoming a ghost town because businesses just couldn't afford to stay in business, San Francisco is thriving and has caused other cities to follow suit, including Seattle, San Jose, and Washington, D.C.. Chicago and New York are also looking to adopt San Francisco's higher wages and better benefits laws.

Theory Versus Reality

Some economists still claim that by using money to lift people out of poverty, we will destroy the economy. However, when we look at cities and neighborhoods that have enacted laws to close the gap between the rich and the poor by paying workers more, it seems perhaps these prophets of doom are mistaken.

Why? When people can afford to purchase goods and services, they patronize the businesses that offer, well, goods and services. Then, instead of going out of business, those employers (who own businesses that sell goods and services) have to hire more people -- and pay them. It works in San Francisco, and it can work in your city, too.

Now, can we please just raise the minimum wage on the federal level?

Tell Us What You Think

Do you think we should raise the minimum wage, and why or why not? We want to hear from you! Leave a comment or join the discussion on Twitter.

3 Comments

  1. 3 Ryan 12 Apr
    Hawaii has finally passed the law that will raise the minimum to $10/hr BUT it will increase it in increments each year till it's $10/hr in 2018... So the minimum wage earners will automatically receive raises each year, not on performance or increased skill level while the ppl who make a bit more than $10/hr will receive nothing. Is this "fair" in our unfair world..? Will those who are at the minimum wage level educate themselves, increase skill level, increase performance and productivity, drive, willingness, determination, as many slightly higher wage earners are already expected to do pet their job description...? I am speaking from personal experience as I make "peanuts" over the entry level skilled workers, and find it frustrating that even though they will receive an AUTOMATIC wage increase whether they strive or not... All I guess I can say is the McDs cashier better give me my TWO cream & sugar when I ask them AND 5 packets of ketsup w/ my fries! 
  2. 2 Priscilla 10 Apr

    The minimum wage needs to be raised to $10 per hour at the federal level soon.

    Oil and gasoline prices have tripled the last decade; and many food and utility costs have nearly doubled over the same time period.

    $7.75 workers are unable to sustain themselves on any level.

    Corporations have cash-on-hand and are waiting for what? There is nothing preventing any company or individual to 'found the next Google to employ 30,000 high paying jobs'.

    Rather than innovate and grow, some corporations hold onto their cash reserves, or buy large amounts of their own stock.  Or approve large payments to the top executives.

    Capitalism can be a good thing 'on the way up', with all parties sharing a piece of the pie.  However, 'on the way down', many employees at the bottom find that their slice of the pie has been taken already, and they must go without.

    At this time it is evident to me that the minimum wage needs to be raised at the federal level to prevent further poverty and social decline.

     

  3. 1 Will 10 Apr
    Wow, you need to stop letting your politically bias writers
    create your posts.. Don't forget that this site targets people in corporate America and I suggest you stay away from politics (on both side of the isles).

     

    However, let's address Beth's flawed assumption. So she assumes that just because SF is doing well that the minimum wage increases are to credit or didn't have any negative affects. Perhaps SF is doing well in spite of these laws not because of them? When you pass a law that forces people to take an action what you don't see is the missed opportunities. So, we could pass a law that requires every police officer in America to break all the windows in everyone's house and this would in turn force everyone to go out and buy new windows. The window makers/installers would boom and they would hire more people who could then go out and spend money. But what you didn't see is all the things that might have happened if the market was able to work on its own (all the missed opportunities). Perhaps one person could have used his window replacement money to found the next Google which employs 30,000 to 50,000 high paying jobs.

     

    Beth is arrogant to assume she knows what is best for the entire economy. What is best for the economy is the efficient flow of capital through our markets.

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