Today, millions of Americans do arduous work in jobs that pay too little and offer very few benefits, while Corporate America makes billions in profits! They serve food, clean offices, care for the young and elderly, stock shelves, and deliver pizza. They work hard year after year while caring for children and parents, trying to save for college and paying their bills.
But despite their best efforts, these low-wage workers are falling further and further behind. According to an Oxfam interactive map, the federal minimum wage of $7.25/hr is locking millions into poverty. The way we see it, if you work hard, you should earn enough to get by. And right now, the place to start is to raise this poverty wage.
That’s why increasing the federal minimum wage to $15 is so important. It would benefit nearly 40 million workers and their families. Here are five simple reasons why raising the wage makes sense—and should happen TODAY:
It is long overdue
In the 13 years since it was last raised, the minimum wage has failed to keep up with inflation, failed to keep up with average wages, and—most dramatically—failed to keep up with incomes of the top 1 percent and CEOs, contributing to America’s growing inequality.
As a result, low-wage workers are not benefiting from economic growth and productivity. If the minimum wage had kept pace with productivity increases, it would be around $20/hr. Just 30 years ago, the average pay gap between CEOs and workers was 59 to 1; last year, it soared to 361 to 1. The average CEO makes $13,940,000, while a minimum wage worker makes $15,080: a gap of 924 to 1
It would reduce poverty
The bump from $290 a week to $600 a week would lift millions of families out of poverty. More than a quarter of the workforce—40 million workers—would see a raise in wages.
It would fuel economic growth
The roughly $120 billion extra paid to workers would be pumped back into the economy for necessities such as rent, food, and clothes. Economists have long recognized that boosting purchasing power by putting money in people’s pockets for consumer spending has positive ripple effects on the entire economy.
In one recent poll, 67 percent of small business owners support the minimum wage increase to $15 an hour. They say it would spark consumer demand, which would enable them to retain or hire new employees.
And raising the wage doesn’t seem to compel employers to cut jobs. As states and cities across the country have raised wages, research has found no statistically significant effect on employment
It would save taxpayer money
When employers don’t pay people enough to survive, those workers are compelled to seek government assistance, meaning taxpayers are essentially subsidizing the corporations.
In 2019, the Economic Policy Institute found that, among recipients of public assistance, most work or have a family member who works; and they are concentrated at the bottom of the pay scale. Raising wages for low-wage workers would “unambiguously reduce net spending on public assistance, particularly among workers likely to be affected by a federal minimum-wage increase.”
It’s what the vast majority of Americans want
Vast majorities (up to three quarters, including a majority across party lines) support raising the wage. In fact, over half the states have raised their minimum wages to restore basic fairness to the workforce.
All work has dignity and worth. After 13 years of working hard, low-wage employees deserve a bump to get them and their families out of poverty. This legislation needs to passed and become effective NOW!.
At Demand Wealth, we not only believe that everyone should be compensated fairly for their hard work, we practice it. Even our Summer interns make over $15 an hour! Furthermore, it’s our mission and passion to provide access to professional financial planning and investment management at an affordable price. If you are interested in pursuing an investment strategy that aligns with your diligence, values and personal financial goals, schedule a video conference with one of our advisors regarding a comprehensive plan today. We are here for you!
This report is a publication of Demand Wealth. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change.