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Should the Minimum Wage be Raised?

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The federal minimum wage is $7.25 per hour effective July 24, 2009. A few States such as California have their own which is higher to reflect the higher cost of living there. But even in those regions, the minimum wage is no where near the living wage figure of $15 per hour.

For the purposes of this discussion, I will focus on the Federal one since it is the one that affects most Americans.

In President Obama's State of the Union speech,last night, he spoke on this topic saying:

“After four years of economic growth, corporate profits and stock prices have rarely been higher, and those at the top have never done better. But average wages have barely budged. Inequality has deepened. Upward mobility has stalled,” Obama said. “The cold, hard fact is that, even in the midst of recovery, too many Americans are working more than ever just to get by — let alone get ahead. And too many still aren’t working at all.”

“Opportunity is who we are,” he said. “And the defining project of our generation is to restore that promise.”

There is a debate going on by many low wage workers to raise it nationally to $15 per hour. Last year there were many protests where fast food workers, janitors, nursing home employees and retail workers, gathered across the Country demanding that it be raised.

To raise it to $15 per hour would have to happen gradually in incremental steps,otherwise the burden on employers would be too great.

Those opposed to raising it say it would kill jobs raise prices on consumers and that few people actually earn $7.25 an hour.

The argument that it will eliminate jobs is a familiar one,every time this topic comes up for discussion. But historically every time it has been raised, the mass job loss predicted hasn't occurred.

Yes, a wage increase will raise prices as employers will justifiably pass it on to their customers. But the increase in prices is not significant. A study last year in fact said that even if it went up to$15 an hour-the cost of a Big Mac would only have to go up 68 cents, hardly a big hit.

Again, it can't be raised to that $15 figure all at once anyway.

Granted when you look more closely at those who actually earn just $7.25 per hour, the number may not seem that big,but it fails to take into account the millions more who just barely make more than that say at $7.40 per hour.

Another myth perpetuated by opponents is that the average fast food worker is a teenager living at home with his or her parents, and therefore it is unnecessary to increase it. That may have been the case in the past,but due to the recession the average fast worker is now 28.

Another argument against raising it to a living wage figure of $15 per houris that these are entry level jobs, a stepping stone to more lucrative employment. While this is true, no one is going to get rich or even comfortable on a gross income of $2,400 per month, and that would be for a 40 hour workweek, and not all work full time.

The biggest area where proponents and opponents should agree on is that 48 million Americans are on food stamps, many of those minimum wage (or just above) workers.

There is something inherently wrong with someone who has a job and yet doesn't have enough money left to buy groceries. These aren't so called 'Welfare Queens.'

Formally called Supplemental Nutrition Assistance, or SNAP, the program now covers 1 in 7 Americans. The Federal Government is spending twice the amount on this program than even five years ago. Full- and part-time workers employed year-round saw the fastest growth in food stamp participation since 1980, making up 17 percent and 7 percent of households, respectively.

Raising the minimum wage to the eventual goal of $15 per hour would slowly get working people off government assistance, something that both sides of the argument would applaud.

It would reduce the government deficit and those workers would have more money to spend helping our economy, since 72% of it is dependent on consumer spending.

Tying the minimum wage to inflation would allow it to rise along with the cost of living. Increasing the minimum wage is a way to reduce employee turnover and improve workers’ productivity.

It would be step towards shrinking the chasm of inequality that is plaguing America.

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