Top 10 Reasons the Government Should Raise the Federal Minimum Wage
The minimum wage is a point of contention for almost all Americans. The people who make minimum wage insist that it is not enough to live on, and they simply cannot comfortably buy all of the basic necessities required for normal life including food, housing and insurance when they make less than $10 an hour.
Conversely, the people that pay their workers minimum wage insist that the minimum wage must remain low for the sake of everyone. Big corporations say that if workers want to keep their jobs, they must accept a low wage because anything higher would destroy the business and stall job growth.
The government is caught somewhere in between. In its heart, the government knows that Americans need to make more money to live and care for themselves and their children. However, the government is also tied to big business, which directly influences campaign funds and policy decisions by extension.
The federal government needs to shake off the yolk of big business and begin to listen to its citizens and its economists. Raising the federal minimum wage will not wage war on the economy. On the contrary, it will end up benefiting everyone in different ways.
Here are the top 10 reasons the government should raise the federal minimum wage:
It Will Help Americans Make Ends Meet
The price of essentials, such as housing and food, are rising in America. This rise is simply not met by the minimum wage. The result is that the minimum wage workers that America relies on to keep other goods affordable are literally left out in the cold.
America needs a minimum wage. There is no doubt about that. The minimum wage is a useful tool for the economy to keep a ceiling for the cost of goods throughout many industries. However, there is no rule that says that the minimum wage cannot be a living wage. The current minimum wage is not suitable for meeting the basic living costs of most of the American public.
Of course, living costs differ by geographic area. It is much cheaper to live in rural Iowa than it is to live in San Francisco. However, it is not how much families struggle, but that they struggle at all, that should prompt a national minimum wage.
The federal government should set a minimum wage for workers across the country. This would help ensure that both people in Iowa and people in California have the money they need to live their lives and feed their children. This can serve as a baseline number for the states to adjust according to local living costs. However, it is the national government that should set the standard for fair wages so that it can lead by example.
Raising the minimum wage to $10.10 would help 27 million workers bring home an extra $35 billion annually.
It Will Help Alleviate Income Inequality
Income inequality in America is no longer an issue that simply requires your attention. It is an epidemic, and the closest thing that the country has to a financial plague.
The country’s top earners do not earn 10, 20 or even 30 times as much as the lowest paid workers. The CEOs of companies in America make 933 times more a year than a person who works full-time and receives minimum wage.
This sets a dangerous precedent for Americans. It suggests that some Americans are worth nearly 1,000 times more than others. This is simply not true. Most CEOs would not have companies to run without people who were willing to work for minimum wage. It is these workers who are the backbone of American society, not men in ivory towers.
Raising the minimum wage will help alleviate this income inequality by making it easier for people to live fuller lives on the minimum wage. The minimum wage workers of America are important. The federal government can show them that by putting their needs above the needs of the CEOs and raising the minimum wage.
It Won’t Stop Job Creation
Every time they are asked about raising the national minimum wage, the politicians cry out and say that by doing so that it would slow job creation. For Washington, job creation is the trump card in the fight for more equal pay.
There is no historical evidence that suggests that raising the minimum wage would destroy jobs. In fact, the idea of this is ludicrous. The minimum wage has risen substantially over the last 50 years, and jobs have not dwindled. Americans on minimum wage make twice as much as they used to, but that has not killed jobs. The idea that the minimum wage kills jobs is what the big business owners and their personal politicians want you to believe. They don’t want to pay higher wages because it means that there is less money left over for themselves.
The key findings of the Harkin-Miler proposal show that if the federal minimum wage was increased to $10.10 the effects on the GDP would be positive. This increase would affect 27.8 million workers who would all take home substantially higher wages, and then spend these wages in the economy. The result would be a $22 billion growth in the GDP. That growth would translate to the creation of 85,000 new jobs.
The rich cannot even fathom a world where the rest of the population have any type of disposable income. However, it is important that they begin considering it. Although they would be knocked from their spots as society’s elite, they would actually benefit from it over the long term. When more people have more money to spend, this would provide a moderate boost to the economy, and a better economy benefits everyone.
It Would Relieve People from Relying On Food Stamps
There is a big disconnect between the people that are supposed to use food stamps and the people who actually rely on food stamps. By definition, one might assume that food stamps would be used only by the very poor and unemployed. Unfortunately, the under-employed are also reliant on food stamps in order to make ends meet.
Raising the minimum wage could help minimum wage workers be able to afford basic food products so that they are not required to rely on government assisted food programs.
A recent report suggests that if the minimum wage was increased by only 10 percent, it would reduce the food stamp program enrollment between 2.4 and 3.2 percent. It would also reduce the program’s costs by 1.9 percent.
If the government chose to raise the federal minimum wage to $10.10 per hour, the raise would result in the reduction 7.5 percent to 8.7 percent of current food stamp enrollments. This means that between 3.1 and 3.6 million people could afford their food on their own.
Preventing more people from relying on food stamps would do more than just save the government money. It would boost the self-esteem of all of the people who work hard, but still need extra help. It would help them make ends meet and help them avoid the stigma that so much of society associates with government assistance programs.
This boost in self-esteem for three and a half million people does not have a valuation; however, it comes at a price. The workers should not have to bear this price. Instead, they should benefit from a government that helps them earn a living instead of preferring an economy that takes advantages of its workers by paying them pennies.
It Will Save the Federal and State Governments Money
Both the federal government and the state government spend a lot of money helping out the poor. They help the unemployed, the sick and even those who work full time jobs but cannot provide for their families. Raising the minimum wage would save the government money because a raise to $10.10 would take 1.7 million people off of various types of public assistance.
For example, the higher minimum wage would result in a less expensive food stamp program. Raising the minimum wage would result in a 6 percent cut in the amount of money the program needs to operate. This 6 percent cut would result in a savings of $4.6 billion dollars annually. This is only one of the government assistance programs that would benefit from a higher minimum wage.
There are several other programs that would require less money if Americans relied on them less. Overall, the federal government alone could stand to save $7.6 billion dollars from all of these programs because 27 million American workers would be receiving a wage that they could live on.
This money could then be reallocated to give greater help to those who are poor and vulnerable and to help fewer people rely on government programs in the future.