Increasing the minimum wage has been a long-debated topic in Washington and statehouses across the nation. What a minimum wage increase could do to our economy is more beneficial than allowing the free market to decide wages for workers. So we ask ourselves if the minimum wage increase is a good idea, and, in my opinion, that answer is a resounding “yes.”
That’s not to say legislating market outcomes is a completely foolproof way to resuscitate a failing economy. Every basic Economics 1 textbook will lay out potentially disastrous outcomes from policies like rent control, and most people agree that setting a high minimum wage will cause many problems.
The great thing about the argument that is going on is that no one is proposing a ridiculously high minimum wage, and the proposal made by President Barack Obama to raise the minimum wage to over 10 dollars an hour in his last State of the Union Address would have positive effects.
In the last half century, minimum wage has often lagged behind inflation. This means our national minimum wage of $7.25 per hour is actually lower in real terms than it was in the 1980s by over a dollar, according to the Federal Reserve.
A common argument against raising the minimum wage is the threat of job loss. The sovereignty of our state governments has provided case studies for economists when one state raises the minimum wage and another doesn’t. The Center for Economic and Policy Research published results of these experiments, and those results show little negative correlation between wage increase and employment.
There is no real answer as to why this is the case, but one can begin to understand when they stop looking at workers as numbers and start seeing them as human beings. Human relationships involved in hiring and firing are much more complex than commodity markets. Workers are not bushels of wheat. So without the correlation between wage increases and job loss, we are left with hard-working, low-paid Americans getting a much-needed increase in their salary.
Lastly, the economy is weak, the middle class is shrinking and the money is no longer flowing through the lower classes of society. A minimum wage increase would do a lot to stimulate the economy by putting money into the hands of the spenders. Wage increases would encourage work over welfare, reduce dependence on government programs and lift thousands out of poverty.
Raising the minimum wage to a level that is in line with inflation is both good economics and good politics. An increase is favored by an overwhelming majority of voters, both Democrats and Republicans, and it should be implemented. We owe it to workers who have squeezed out of the middle class to recreate the middle class and build a stronger economy for future generations.