- Jan 15, 2013
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It is basic economics 101.
When the minimum wage was first enacted in the US there was a significant growth in the economy. Do your homework and look it up folks.
Here are a few things you need to consider:
Minimum wage increases put money in the pockets of low-wage workers who have little choice but to spend that money immediately in their local communities. Research has shown that raising the minimum wage boosts consumer spending, increasing the demand that drives economic growth.
A 2011 study by the Chicago Federal Reserve Bank finds that minimum wage increases raise incomes and increase consumer spending, especially triggering car purchases. The authors examine 23 years of household spending data and find that for every dollar increase for a minimum wage worker results in $2,800 in new consumer spending by his or her household over the following year.
A 2009 study by the Economic Policy Institute estimates that Obama’s campaign pledge to raise the minimum wage to $9.50 by 2011 would inject $60 billion in additional spending into the economy.
When the federal minimum wage was first enacted in 1938 at the height of the Great Depression, its twin goals were maintaining a wage floor to keep workers out of poverty, and stimulating the consumer spending necessary for economic recovery. President Franklin Roosevelt called for its enactment as “an essential part of economic recovery,” explaining that by increasing the purchasing power of those workers “who have the least of it today, the purchasing power of the Nation as a whole – can be still further increased, (and) other happy results will flow from such an increase.”
Another widely cited study by economists David Card and Alan Krueger found that a higher minimum wage can boost job creation for low-skilled professions, while the Organization for Economic Co-operation and Development recently reported an increase could help reduce, however minutely, the rate of income inequality in the U.S. by pushing up the incomes of the poor.
That could even fortify the economy, according to the Federal Reserve Bank of Chicago, which reports that, for every $1 increase in the minimum wage, spending by households with minimum wage workers increased by $700 per quarter.
The state of Washington has the highest minimum wage in the country at $9.19 an hour. Nineteen states have a minimum wage higher than the federal level, while four have set it below the $7.25 federal standard. Georgia and Wyoming currently have the lowest minimum wages, at $5.15 per hour.
The United States has one of the lowest minimum wages among developed countries, according to the International Labor Organization’s most recent Global Wage Report. With a minimum wage at below 40 percent of the average salary, only Japan and Spain pay their lowest-rung workers less.
Raising the minimum wage and indexing it to inflation,would be one step toward easing the burden on the working poor, according to the Obama administration. But top Republicans, such as House Budget Committee Chairman Paul Ryan and Sen. Marco Rubio, have already clearly expressed their opposition to the plan, relying on the age-old argument that businesses will hire less if they are forced to pay more – even an extra $1.75 per hour. *This is incorrect, outdated ideas, and proven wrong by most economists.
History, however, indicates otherwise. While some studies, such as a 2010 report in the Review of Economics and Statistics, found “no detectable employment losses from the kind of minimum wage increases we have seen in the United States,” those wage increases still benefit those who are currently employed. For instance, the Center for American Progress reports a small pay bump could ultimately pay for itself by boosting worker productivity and reducing turnover and vacancies.
“Economists have evaluated the impact of minimum wage increases practically since the inception of the wage floor in the 1930s. At this point, it is fair to say that the debate over the purported job-loss effect is a debate over whether this effect is slightly below zero, or at zero,” reported the Economic Policy Institute back in 1999, when Congress was debating raising the minimum wage to $6.15 an hour.
Links: http://www.ibtimes.com/no-raising-minimum-wage-will-not-lead-massive-job-losses-1083496
http://en.wikipedia.org/wiki/Minimum_wage_in_the_United_States
It's real simple if people have more disposable income they are then able to spend more which goes straight into companies/corporations businesses, thus a demand for goods and services is created and then these companies/corporations start hiring.
When people have less disposable income, they don't spend, and businesses suffer due to profit loss, then start laying off people.
When the minimum wage was first enacted in the US there was a significant growth in the economy. Do your homework and look it up folks.
Here are a few things you need to consider:
Minimum wage increases put money in the pockets of low-wage workers who have little choice but to spend that money immediately in their local communities. Research has shown that raising the minimum wage boosts consumer spending, increasing the demand that drives economic growth.
A 2011 study by the Chicago Federal Reserve Bank finds that minimum wage increases raise incomes and increase consumer spending, especially triggering car purchases. The authors examine 23 years of household spending data and find that for every dollar increase for a minimum wage worker results in $2,800 in new consumer spending by his or her household over the following year.
A 2009 study by the Economic Policy Institute estimates that Obama’s campaign pledge to raise the minimum wage to $9.50 by 2011 would inject $60 billion in additional spending into the economy.
When the federal minimum wage was first enacted in 1938 at the height of the Great Depression, its twin goals were maintaining a wage floor to keep workers out of poverty, and stimulating the consumer spending necessary for economic recovery. President Franklin Roosevelt called for its enactment as “an essential part of economic recovery,” explaining that by increasing the purchasing power of those workers “who have the least of it today, the purchasing power of the Nation as a whole – can be still further increased, (and) other happy results will flow from such an increase.”
Another widely cited study by economists David Card and Alan Krueger found that a higher minimum wage can boost job creation for low-skilled professions, while the Organization for Economic Co-operation and Development recently reported an increase could help reduce, however minutely, the rate of income inequality in the U.S. by pushing up the incomes of the poor.
That could even fortify the economy, according to the Federal Reserve Bank of Chicago, which reports that, for every $1 increase in the minimum wage, spending by households with minimum wage workers increased by $700 per quarter.
The state of Washington has the highest minimum wage in the country at $9.19 an hour. Nineteen states have a minimum wage higher than the federal level, while four have set it below the $7.25 federal standard. Georgia and Wyoming currently have the lowest minimum wages, at $5.15 per hour.
The United States has one of the lowest minimum wages among developed countries, according to the International Labor Organization’s most recent Global Wage Report. With a minimum wage at below 40 percent of the average salary, only Japan and Spain pay their lowest-rung workers less.
Raising the minimum wage and indexing it to inflation,would be one step toward easing the burden on the working poor, according to the Obama administration. But top Republicans, such as House Budget Committee Chairman Paul Ryan and Sen. Marco Rubio, have already clearly expressed their opposition to the plan, relying on the age-old argument that businesses will hire less if they are forced to pay more – even an extra $1.75 per hour. *This is incorrect, outdated ideas, and proven wrong by most economists.
History, however, indicates otherwise. While some studies, such as a 2010 report in the Review of Economics and Statistics, found “no detectable employment losses from the kind of minimum wage increases we have seen in the United States,” those wage increases still benefit those who are currently employed. For instance, the Center for American Progress reports a small pay bump could ultimately pay for itself by boosting worker productivity and reducing turnover and vacancies.
“Economists have evaluated the impact of minimum wage increases practically since the inception of the wage floor in the 1930s. At this point, it is fair to say that the debate over the purported job-loss effect is a debate over whether this effect is slightly below zero, or at zero,” reported the Economic Policy Institute back in 1999, when Congress was debating raising the minimum wage to $6.15 an hour.
Links: http://www.ibtimes.com/no-raising-minimum-wage-will-not-lead-massive-job-losses-1083496
http://en.wikipedia.org/wiki/Minimum_wage_in_the_United_States
It's real simple if people have more disposable income they are then able to spend more which goes straight into companies/corporations businesses, thus a demand for goods and services is created and then these companies/corporations start hiring.
When people have less disposable income, they don't spend, and businesses suffer due to profit loss, then start laying off people.
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