Millions of U.S. workers to see pay raise with minimum wage hike to $7.25
Posted Jul 14th 2009 3:00PM by Joseph Lazzaro
Filed under: Forecasts, Good news, Employees
The lowdown on the July 24 increase in the the federal minimum wage? It will be net-positive for the U.S. economy.
From the rhetoric of the supply side theorists --- the same professionals who advocated more than $1 trillion in 2001-2008 upper-income-favoring tax cuts that created the fewest jobs in any 8-year presidency since World War II --- increasing the minimum wage by 10.7 percent to $7.25 per hour will mark the end of the free enterprise system in the United States, or something close to it.
Higher minimum wage: Will the economy cease to exist?
Tens of thousands small businesses will go out of business, millions of jobs will be lost, the supply side theorists, and other economic conservatives, assert.
The reality: the the federal minimum wage increase will serve as a valuable stimulus factor in an economy that needs all of the stimulus it can get. Moreover, particularly in the 'frugal consumer' era - a pay increase for any employee - particularly low-wage workers - is a welcome sight: every dollar spent or saved in the workforce is one more dollar that re-circulates through U.S. commerce or that benefits the U.S. investment.
Still, the critics counter that it's perfectly acceptable to pay the lowest-valued work categories sub-living wages because these are 'transitional jobs' that citizens hold for awhile, obtain new skills/experience, and then move on to other, higher-paying positions.
For many, minimum wage is their only wage
They reality is quite different: many citizens remain in minimum wage positions for long periods of time. And for some - including those in the cleaning, hospitality, hairdressing, textile, social care, and retail sectors - this is when their raise occurs: when the federal law says it must. It goes without saying then, that for these citizens, the federal minimum wage increase is no inconsequential event.
Economic Analysis: Those who are concerned that the minimum wage is getting too high should digest this statistic: in real, inflation-adjusted terms, the new minimum wage will still be below the $9 per hour minimum wage of the late 1960s.
Further, despite three decades of increasing worker productivity - including the super-productivity era of the Roaring 1990s - the nation somehow nevertheless saw fit to let the minimum wage decline, in real terms, from $9 per hour to $5. What's more, the nation thought the U.S. economy would be strengthened by an economy that generates less disposable income for lower-income workers! Talk about self-defeating policies. The nation is now bearing some the fruits of that deeply economically-flawed philosophy - not the least of which is an economy where an increasing percentage of employees do not have incomes high enough to support adequate U.S. GDP growth. Thankfully, the higher minimum wage, and companion Obama administration economic policies, will help reverse that trend.
What's your view of the higher federal minimum wage? Let us know what you think.
Posted Jul 14th 2009 3:00PM by Joseph Lazzaro
Filed under: Forecasts, Good news, Employees
The lowdown on the July 24 increase in the the federal minimum wage? It will be net-positive for the U.S. economy.
From the rhetoric of the supply side theorists --- the same professionals who advocated more than $1 trillion in 2001-2008 upper-income-favoring tax cuts that created the fewest jobs in any 8-year presidency since World War II --- increasing the minimum wage by 10.7 percent to $7.25 per hour will mark the end of the free enterprise system in the United States, or something close to it.
Higher minimum wage: Will the economy cease to exist?
Tens of thousands small businesses will go out of business, millions of jobs will be lost, the supply side theorists, and other economic conservatives, assert.
The reality: the the federal minimum wage increase will serve as a valuable stimulus factor in an economy that needs all of the stimulus it can get. Moreover, particularly in the 'frugal consumer' era - a pay increase for any employee - particularly low-wage workers - is a welcome sight: every dollar spent or saved in the workforce is one more dollar that re-circulates through U.S. commerce or that benefits the U.S. investment.
Still, the critics counter that it's perfectly acceptable to pay the lowest-valued work categories sub-living wages because these are 'transitional jobs' that citizens hold for awhile, obtain new skills/experience, and then move on to other, higher-paying positions.
For many, minimum wage is their only wage
They reality is quite different: many citizens remain in minimum wage positions for long periods of time. And for some - including those in the cleaning, hospitality, hairdressing, textile, social care, and retail sectors - this is when their raise occurs: when the federal law says it must. It goes without saying then, that for these citizens, the federal minimum wage increase is no inconsequential event.
Economic Analysis: Those who are concerned that the minimum wage is getting too high should digest this statistic: in real, inflation-adjusted terms, the new minimum wage will still be below the $9 per hour minimum wage of the late 1960s.
Further, despite three decades of increasing worker productivity - including the super-productivity era of the Roaring 1990s - the nation somehow nevertheless saw fit to let the minimum wage decline, in real terms, from $9 per hour to $5. What's more, the nation thought the U.S. economy would be strengthened by an economy that generates less disposable income for lower-income workers! Talk about self-defeating policies. The nation is now bearing some the fruits of that deeply economically-flawed philosophy - not the least of which is an economy where an increasing percentage of employees do not have incomes high enough to support adequate U.S. GDP growth. Thankfully, the higher minimum wage, and companion Obama administration economic policies, will help reverse that trend.
What's your view of the higher federal minimum wage? Let us know what you think.
