Increasing the Minimum Wage

Over at The Nation, they are framing a minimum wage increase as a moral issue instead of an economic one.

Business leaders still trot out economists to claim that raising the minimum wage will destroy jobs and hurt small businesses. But the evidence, based on studies of the effects of past increases in both the federal and state minimum-wage levels (twelve states have minimum wages higher than the federal level), shows otherwise. Because the working poor spend everything they earn, every penny of a minimum-wage increase goes back into the economy, increasing consumer demand and adding at least as many jobs as are lost. Most employers actually gain, absorbing the increase through decreased absenteeism, lower recruiting and training costs, higher productivity and increased worker morale.

I've never understood why it wasn't indexed to inflation from the beginning. Price floors for labor are bad for the economy, but at this point, even teenagers are easily finding jobs for $7/hr. Normally I'm not a big fan of minimum wage increases, but in this case I don't see any problem with raising it if it makes some people feel better. I think the market has already set the minimum wage higher than the federal standard in most areas of the country.

  • hemendra

    minimum wages is harmful for human beings

  • david w

    The minimum wage might not be necessary if state and local govts didnt take twice the percentage of incomes from the working poor as from the rich. They might be unneeded if we didnt put a surcharge on labor costs (fica) and subsidize capital investment, if we didnt subsidize outsourcing, and it the employees share of fica wasnt higher than the effective tax rate on corporate income. our govt has been about making the economy tilt in favor of the rich, so wealth concentration is getting nuts. Instead of arguing against the minimum wage, maybe we could fight to eliminate the mountain of special interest legislation sold by legislators at all levels of govt.

  • Kevin

    I think that if gas prices and other expenses have gone up, then minimum wage should also go up! How can we pay for things we need when we are in school and only getting paid $5-$6 an hr.