Correcting the Record: Minimum Wage Increases are Good for the Economy

One of the key points Republicans tried to make at the last debate on Fox Business was a fantasy in which someone making very little money makes more and it’s somehow disastrous for the economy. In fact, Ben Carson even claimed that “every time” the minimum wage increases, we lose jobs.

ben-carson-jesusYou should know that, just as philosophers actually make more than welders, Republicans’ notions of economy are just complete garbage, and you should take everything they say with not just a grain of salt, but the entire salt flats in Utah. In fact, you could make the case that a little bourbon would be worthwhile when you hear that kind of thing. Put it this way; how is it possible that giving extremely poor people more money is bad for a consumer-driven economy, while giving rich people tax breaks they don’t even realize they’ve received is great for it? That makes absolutely zero sense.

Raising the minimum wage has never led to a significant economic downturn, nor has it led to a significant increase in the unemployment rate. In fact, since 1938, there have been 22 increases in the minimum wage, and per capita GDP and per capita wealth have increased all but once; in 2008, and gee, I wonder what happened then. Why would a minimum wage increase lead to economic disaster, anyway? It assumes two things that are ridiculous, if you bother to think about it. First, it assumes that those who see an increase in pay won’t spend it in businesses that pay minimum wage, even though poor people spend a whole lot more of their money than rich people. But it also assumes that companies that pay minimum wage or slightly above hire a lot more people than they need, and when the wage goes up, they can just lop workers off the payroll.

Most of the arguments against raising the minimum wage make no sense. Take this testimony before Congress made by some paid hack at the Heritage Foundation a couple years ago:

Relatively few Americans (make the minimum wage). In 2011 and 2012, 3.7 million Americans reported earning $7.25 or less per hour—just 2.9 percent of all workers in the United States. Those who do work in minimum-wage jobs fall into two distinct categories: young workers, usually in school, and older workers who have left school. Most minimum-wage earners fall into the first category; just over half are between the ages of 16 and 24. The rest are 25 or older.

Too many people actually believe this type of nonsense, and that’s sad. I know, it is the Heritage Foundation, so what else should we expect but pure BS? I think it’s time we started moving beyond the right wing bullshit and into some fact. For example, this issue isn’t just about people who make exactly the minimum wage. to make it about that trivializes the issue, which is of course the point of this right wing “think tank” anyway. It’s obfuscation, pure and simple.

In 1968, the minimum wage was increased to $1.60 an hour. In 2015 dollars, that would be the equivalent of $10.94 per hour. That means the people who are making $7.25 per hour right now would have to see a nearly 50 percent increase in pay just to break even with what their predecessors made in 1968. It means the $10.10 that has been proposed several times in the last few years would still leave them a little bit behind. And when you look at the garbage spewed by Heritage in that statement, you have to dismiss the silliness that “only” 3.7 million people currently make the $7.25 minimum wage, since everyone making less than $10 per hour would be affected, and as of 2014, that number topped 18 million. If you raise the minimum wage to $15 an hour, which would put our minimum wage on a par with a large portion of Europe and Australia, you’d find that almost 38 million workers would be getting raises.

dollar signIt’s also helpful to point out that 29 states and the District of Columbia have a minimum wage above $7.25 per hour, and the national unemployment rate has dropped from 10% to 5% in the last six years, apparently despite that, according to the millionaires on the Fox Business stage the other night.

However, focusing on the numbers clouds the issue of fairness; a concept we used to believe in as a nation. And when we did believe in it, the nation thrived. The problem with the minimum wage is that it is impossible for anyone to live on these days. While the impression is that it’s mostly small businesses that pay the minimum, that’s a load of crap; most minimum wage workers toil for huge corporations who are raking in large piles of cash; cash that the Republican Party isn’t even making them pay much tax on. Perhaps ironically, minimum wage workers pay more in taxes than many of the corporations who make money from them.  Not only that, but we taxpayers largely subsidize their crappy wages, by providing them with SNAP money, so they can buy food and subsidies and Medicaid so they can afford to buy health insurance for their families.  In other words, we are largely paying so they can make enough to live on, while the companies that hire them make massive profits and pay less in taxes than we do on that money. Why is it that huge companies that pay somewhere around the minimum wage get to treat their employees as if it’s the employees who owe them, when it’s actually the other way around?

Americans love to talk about ourselves as if we’re the greatest country on earth, and yet we act like we’re mediocre. Australia’s minimum wage is right around $16 per hour, and it’s been there for years. Many of the same companies that operate here, like Walmart, Target, McDonalds, K-Mart and Burger King, among many others, operate there, and one can assume that they make plenty of money; it’s not like they’re all closing up shop. Most workers at the same discount stores that whine about a minimum wage increase here are unionized in Europe and their workers make nearly twice as much, and they’re not closing stores there. Does that mean their workers are nearly twice as good? Of course not; they do the same things American workers do; the only difference is, they get to go home at the end of the day and know they can pay their bills.

Klown Kar 1I’ve been talking about the Republicanization of the United States for years now, and it has to stop. And we have to stop kopwtowing to the Republican mentality, in which they get to ignore history and just make up bullshit out of whole cloth and pass it off as fact. Everything they say about the minimum wage and its effects on the economy is just pure bullshit. Raising the minimum wage has never resulted in an economic downturn, nor has it resulted in a huge loss of jobs. It’s counter-intuitive, anyway. How is giving 38 million people an increase in pay in any way detrimental to the overall economic health of the country?

This is yet another reason why everyone needs to focus on getting rid of the current Republican Party.

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