Big Surprise: Raising the Minimum Wage Is Good for the Economy
Opponents of raising the minimum wage continue to scream that paying working class people higher wages will destroy the economy and the American way of capitalistic freedom will end. We have hard evidence that this is simply not true.
(Photo Credit: Fibonacci Blue/Flickr)
Thirteen states raised the minimum wage at the beginning of 2014: Rhode Island, Colorado, Montana, Vermont, Arizona, Oregon, Florida, Washington, Ohio, New York, West Virginia, New Jersey and Connecticut. Far from tanking their economies, these 13 states have enjoyed an average of 0.28 percent rise in employment since the start of the year.
Naysayers will argue that 0.28 percent is not much to celebrate, but remember, those against raising the wage have said it will cause employment to decrease. It hasn’t; and just the opposite is happening in states with higher minimum wages.
A recent Reason-Rupe poll found that about 67 percent of Americans favor raising the minimum wage to $10.10 per hour. When asked how companies will be able to pay a higher wage, 38 percent of respondents said employers were likely to raise prices, 32 said they’d lay off workers, and 24 percent said companies would cut profits and executive salaries.
We just discussed that raising the wage is not reducing employment; as a matter of fact, just the opposite is happening.
San Francisco and other areas are also demonstrating that any rise in price of goods and services is not hurting businesses. It seems that by raising the wage, more people can afford to purchase goods and services at prices that keep businesses healthy. San Francisco’s data goes back 15 years, and includes not just higher minimum wages but also improved benefits for workers. Recently, Seattle’s mayor struck a deal with business leaders that may enable that city to raise the minimum wage to $15 an hour; time will tell if they have similar results.
So, if raising the wage does not destroy the economy, reduce employment, and raise prices sky-high, what is left? Is it possible we may have to pay chief executive officers a few million less?
Tell Us What You Think
How do you think businesses afford a higher minimum wage? We want to hear from you! Leave a comment or join the discussion on Twitter.