The Benefits of Raising the Minimum Wage
The debate around raising the minimum wage has been a hot topic in political discussions, with arguments being made for and against it. But as we continue to seek ways to improve our economy, the conversation must shift to the benefits that raising the minimum wage would bring to our workers’ well-being. Here are a few reasons why it’s time to invest in our workers by raising the minimum wage.
Reduced Poverty and Economic Inequality
One of the most significant benefits of raising the minimum wage is a reduction in poverty and economic inequality. Historically, the minimum wage hasn’t kept up with the rising costs of living, leaving many full-time workers living below the poverty line. By raising it to a level that would cover basic living expenses, workers would have more financial stability, and the cycle of poverty would be broken.
Furthermore, the current economic disparity has left the country sharply divided. The average corporate CEO makes 278 times more than the average worker. In contrast, low-wage workers often have to work multiple jobs to pay basic expenses. Raising the minimum wage would be a step towards bridging this gap in income and giving low-wage workers their fair share of economic prosperity.
Boosting Consumer Spending
The economy moves when consumers spend their money. As people earn more, they have more disposable income to spend, which can create a ripple effect that positively impacts the economy. Raising the minimum wage would give low-wage workers the purchasing power necessary to engage in the economy beyond mere subsistence living. This means there would be an increase in demand, leading to more production, more hiring, and more spending, which would ultimately stimulate the economy.
Additionally, higher wages improve the mental and physical health of workers, which, in turn, results in lower absenteeism and turnover. The effects of this increase in job satisfaction can be felt across all employees, leading to a more productive and profitable business.
Reduced Dependence on Public Assistance
According to a report released by the National Women’s Law Center, in 2017, more than one in six workers were employed in low-wage jobs, meaning they earn less than two-thirds of the median wage in their area. These workers are often forced to use public assistance programs to make ends meet, leaving taxpayers to foot the bill. Even Walmart, one of the world’s wealthiest companies, has had to rely on public assistance to make up for its low wages.
But when workers earn more, they don’t have to rely on programs like food stamps and Medicaid, which saves taxpayers money. Raising the minimum wage can alleviate the burden on public assistance programs, as it gives low-wage workers financial stability and reduces their reliance on government assistance.
The Arguments Against Raising Minimum Wage
Though the benefits of raising the minimum wage are clear, there are some arguments against it that warrant discussion. The opponents of raising the minimum wage are concerned that it will lead to job loss and decreased economic activity.
The argument is that businesses that rely on low-wage labor will be forced to reduce staff, cut hours, or increase prices to keep pace with increased labor costs. Additionally, businesses may opt to automate jobs to decrease their dependency on human labor.
However, research has shown that minimum wage increases are unlikely to lead to significant job losses. A study conducted by the University of California, Berkeley, found that increasing the minimum wage has no net negative effect on employment. Similarly, a report by the Economic Policy Institute showed that raising the minimum wage would boost economic activity and create jobs.
How To Raise The Minimum Wage
Raising the minimum wage is a contentious issue, with politicians and economists on both sides of the spectrum offering their views. Here are suggestions on the best way to implement an increase to the minimum wage.
Firstly, any increase should be phased in over time so that businesses can adjust without being forced to lay off staff or reduce their hours. It’s important to find a balance between the needs of the workers and the financial stability of the businesses that employ them.
Secondly, an increase in the minimum wage should be accompanied by investment in workforce development programs. Providing workers with the necessary skills and training to progress in their careers can lead to a win-win situation for both workers and employers.
Thirdly, policymakers should take a regional approach to minimum wage rates. It’s unrealistic to expect the same minimum wage rate in all areas of the country, given differences in living costs and other economic factors. A regional perspective can help ensure that the minimum wage is set at a level that best serves the workers’ need and the economy’s stability.
In Conclusion
Raising the minimum wage would offer significant benefits to low-wage workers, the economy, and taxpayers. It would reduce poverty, produce more spending, increase job satisfaction and reduce dependence on public assistance. While opponents of increasing the minimum wage have valid concerns, research has shown that any negative effects are minimal, while the positive benefits far outweigh any potential negative impacts. Policymakers should work collaboratively to develop a regional approach to the minimum wage rate while investing in workforce development programs to ensure low-wage workers have the opportunity to progress in their careers.