ROBERT REICH: Raising the minimum wage from $7.25 to $9 should be a no-brainer. Republicans say it will cause employers to shed jobs, but that’s baloney. Employers won’t outsource the jobs abroad or substitute machines for them because jobs at this low level of pay are all in the local personal service sector (retail, restaurant, hotel, and so on), where employers pass on any small wage hikes to customers as pennies more on their bills. States that have a minimum wage closer to $9 than the current federal minimum don’t have higher rates of unemployment than do states still at the federal minimum.
A mere $9 an hour translates into about $18,000 a year — still under the poverty line. When you add in the Earned Income Tax Credit and food stamps it’s possible to barely rise above poverty at this wage, but even the poverty line of about $23,000 understates the true cost of living in most areas of the country.
Besides, the proposed increase would put more money into the hands of families that desperately need it, allowing them to buy a bit more and thereby keep others working.
A decent society should do no less.
HEIDI MOORE: “There is something truly grotesque about corporate leaders who earn millions of dollars – or even hundreds of thousands of dollars – arguing over paying their workers literally pennies more. Those workers often have to rely on food stamps or government welfare programs to make up the difference. Meanwhile, company CEOs have barely received a cut in pay for years, and on average they make 231 times as much as the average worker. That’s a lot of money, obviously. So the idea that paying $1.50 an hour more in minimum wage would break their companies and force them to save on costs is patently ridiculous. The first and most obvious cost they would have to think about cutting would be their own pay packages. What if those CEOs made, say, only 200 times the average worker? Or 100 times? One suspects their companies could afford that uptick for poorer workers then.”
73% OF AMERICANS SUPPORT raising the minimum wage to $10 an hour: Republicans in Congress oppose any increase to the federal minimum wage, but they might want to do some polling first, as data suggest an increase is incredibly popular among voters. As The Daily Change notes, polling conducted by Lake Research in February 2012 found that not only is support for Obama’s proposed increase “stratospherically high,” voters actually want to go further than the President suggests. Their polling shows 73 percent of voters want to see the minimum wage raised to $10 an hour by 2014, including 50 percent of Republicans (Note: just don’t tell the those Republicans that the president supports it).
- According to Think Progress, a study published in the Review of Economics and Statistics back in November 2010 found “no detectable employment losses from the kind of minimum wage increases we have seen in the United States.” Another study, published in 2011 “found no impact on hours worked or employment levels.”
- In a March 2011 report, the Center for Economic and Policy Research (CEPR) found that raising the minimum wage has no “discernible impact” on employment. CEPR concluded that wage increases are more likely to result in more, rather than fewer, jobs.
- A major study of the minimum wage, done by economists David Card and Alan Krueger and published in September 1994, supports the notion that raising the minimum wage actually increases employment. investigating the effects of New Jersey’s 1992 minimum wage increase from $4.25 to $5.05, the pair revealed job creation was actually strengthened by the increase.
Raising the minimum wage mostly benefits adults, and especially working women: Around 60 percent of workers benefiting from a higher minimum wage are women, and few are teenagers — less than 20 percent.
Raising the minimum wage helps parents: The average worker who would benefit from a rise in the minimum wage to $9 an hour brought home 46 percent of his or her household’s total wage and salary income in 2011, according to the Current Population Survey.
For a working family earning $20,000 – $30,000, the extra $3,500 per year from raising the minimum wage would cover:
- The family’s spending on groceries for a year; or
- The family’s spending on utilities for a year; or
- The family’s spending on gasoline and clothing for a year; or
- Six months of housing.
Raising the minimum wage will boost wages without jeopardizing jobs while improving turnover and productivity: A range of economic studies show that modestly raising the minimum wage increases earnings and reduces poverty without measurably reducing employment, and that in fact employers may see a more stable workforce due to reduced turnover and increased productivity.