Some economists argue that raising the minimum wage gives more people the power to purchase goods and services, while others say that raising the minimum wage hurts the poor, because businesses aren’t able to hire as many low-wage workers. Both arguments are right and wrong at the same time.
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The Wage Gap
In The True Cost of a Higher Minimum Wage, author Zachary Karabell eloquently points out that the minimum wage debate is a distraction from the real issues behind problems with the economy. The problem isn’t a lower or higher minimum wage, it is the ever widening gap between the wealthy and the poor.
Wealth is finite. When we allow the wealthiest among us to hoard their wealth, we prevent that money from changing hands. Money changing hands drives the economy. The hoarding of wealth stagnates the economy for the rest of us.
To quote Karabell, “money has to come from somewhere.” Americans routinely reject taxation, government regulation of businesses, and caps on salaries. Try to discuss fair and equitable distribution of wealth, and Americans act like Vladimir Lenin himself has risen from his grave to take over the 50 states.
The bottom line is greed. The possibility of sitting on a pile of gold is too tempting, no matter how unlikely it is for most of us. Given the choice of sitting on a pile of gold by paying workers a mere fraction of what they need to live, or distributing wealth in a more equitable fashion, too many people choose to try for that pile of gold. Greed is driving the stagnation of our economy, and it’s not the greed of the poor.
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