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Big Surprise: Raising the Minimum Wage Is Good for the Economy

Topics: Current Events
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.

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.

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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.

Public Opinion

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.


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John
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John

Well, if we’re going to raise it to $10.10… why not raise it to $12.00 an hour?

Priscilla
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Priscilla

$7.25 an hour as the Federal minimum wage is not a stepping stone to a higher paying job for thousands of Pennsylvania adults living in poverty.

The last decade saw tripling of gasoline and oil prices, doubling of utility and food prices.

The Federal minimum wage needs to be raised to $10.10 an hour soon.

Period.

Ronald Chu
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Ronald Chu

In a free economy, government should not be involved in setting prices — in this case, wages. I beleive in competition, and it always drives toward better results. Bear in mind that competition does not necessarily drive down wages. Some employers will figure out that to deliver high quality services, they need to pay their employees more, and that in terms attract more business. Workers will improve themselves so that they are more productive and more sought by employers who value their contribution. Government setting mnimum wage destroys this dynamics. That is one step closer to socialism, which we know… Read more »

DRL
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DRL

Why can’t we get people to understand that we will pay for it one way or the other.  I agree with John.  The minimum wage is a stepping stone to a career and full time job.  The people who support arguments increasing the minimum wage are the same morons who believe the government can spend us into prosperity—we just need more time.

Go ahead and increase the minimum wage.  When Burger King starts charging $15.00 for a Whopper, I will be vindicated.

John
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Really? You’re going to cite a 0.28 rise in employment in a quarter of the states in the union to espouse raising the minumum wage will kick start the nation’s economy? Then using a poll that found 67% of the people favor raising the minimum wage? Of course they favor it… who wouldn’t favor receiving more money without needing to work any harder or more hours. Even using phrasing such as “It seems that by raising the minumum wage…” and “time will tell” is proof that there’s nothing concrete in this article to justify the headline, or uphold the this… Read more »

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