Raise the Minimum Wage

By Harold DeRienzo

This past Thursday thousands of low wage workers in 60 cities walked off their jobs demanding an increase in pay to $15/hour.  Of course there will be recriminations from the right concerning how raising the minimum wage will kill jobs, hurt small businesses and hurt teenagers who join the fast food workforce as a stepping stone to higher paid careers. Most such arguments have been shown to be fallacious but they preserver since they fit a convenient and nostalgic sense of the way things should be for those far removed from having to survive, or knowing those trying to survive, on a little more than $13,000 a year.   But what could be the potential upsides of an increase in the minimum wage?

For starters, raising the minimum wage by about $7 an hour could pump over $25 billion into the economy, since you could bet dollars to (Dunkin’) donuts that this money would not be hoarded but spent.  How many additional jobs would that generate?  And that is only looking at the 2.4 million employees in the fast food industry!  Our social security system is in trouble, how much further would benefits extend with an additional $2 billion annual infusion of payroll taxes?  And again, this is only the fast food industry.  How many of the 40-50 million American citizens on food stamps would earn their way out of eligibility for this public subsidy ($31,000 from the $15 hourly pay demand is about 22% higher than the $25,400 eligibility ceiling for a family of three)?  How much money would that save the taxpayer?  And for those of us in the housing field, how much more rental subsidy money would be available if higher incomes allowed for higher shares of the rent coming from the tenant, as opposed to the taxpayer?  If conservatives want government off their backs, raising the minimum wage is one way of doing this.

Other benefits?

What if the price of a burger goes up?  First of all, more families could afford it, but the increased price of a burger, combined with a household head of a family of three not having to work 2700 hours a year (1828 is full time at 35 hours a week) just to achieve poverty level wages, could result in more home cooked meals and healthy lifestyles and perhaps having at least some leisure time.  Healthier lifestyles could result is less obesity, less diabetes, and less public (taxpayer-funded) health expenses.  What if low wages no longer subsidized other costs, such as trucking, which transports most of our food thousands of miles before it ends up on our plates?  What if this leads to a preference for locally grown food, which could reinvigorate our local farming industry and all the supportive and ancillary services necessary to support a thriving, decentralized, ever urban, agricultural sector?  And what if higher wages resulted in the need for less credit, credit that is borrowed by banks for next to nothing and loaned to struggling consumers for nearly 30% interest?  What kind of enhanced quality of life would that result in for the average citizen, not to mention, the economy, by freeing it up for consumer purchases, educational expenses, charitable contributions, and the like?  The money saved by those citizens on what amounts to unnecessary rent being paid to the lords of the economy (the banks) would lift demand and increase jobs.

Of course, there are downsides.  Perhaps the CEOs of many corporate fast food chains will have to scale back a bit on compensation.  Don Thompson, of McDonalds, as an example, might not be able to make over $13 million in annual compensation.  Perhaps bank executives may have to scale back their compensation as well for having the very difficult job of engaging in legally sanctioned loan-sharking.  And if banks were forced to really function as they should, then perhaps Jamie Diamond of JP Morgan Chase might have to learn to get along on less than the $21 million in annual compensation he currently enjoys.  And what if the average worker begins to feel vested in the “American Dream” and begins to take his or her citizenship more seriously by becoming more involved in our so-called democratic system?  This certainly could result in undermining the political choke-hold the corporate sector has on our political system and processes.

Raise the minimum wage to $15 an hour!

Tags: No tags

2 Responses

Add a Comment

Your email address will not be published. Required fields are marked *