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Why the minimum wage must increase

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I read a statistic by those opposed to the minimum wage that only 2% of American workers get paid the minimum wage. While true that is a deliberately misleading statistic because it implies to the listener that low wages are only a problem for a relative few Americans.

Many workers make just above the minimum wage. If a worker makes even a nickel more, they won't be included in such a statistic. An increase in the minimum wage increases wages for not just those at that wage, but those above it.

Also, in many states the state minimum wage is higher then the federal minimum wage, so in states without a state minimum wage, the rate of workers making the federal minimum wage would balance out to even higher then 2%.

Now, we are a demand centered economy. Every recession/ depression we've ever had was largely a product of lack of consumer demand in the economy. Consumers are also of course workers, so when worker pay stagnates next to the wealthy it has a downward negative spiral in our economy.

For example, that the Wal-Mart Walton family controls a wealth equal to the lowest 42% of Americans is not just a staggering statistic, it spells economic troubles because low paid Wal-Mart workers (and the loss of manufacturing jobs overseas by its' offshoring jobs) don't have as much money to spend in the economy because the Wal-Mart heirs get such a large cut.

Minimum wage workers shouldn't be required to essentially subside the rest of the American economy through their low wages. No, hamburgers won't go up $10 (something I have heard by opponents of the M.W.) because workers make a couple of bucks more per hour. It is the right thing to do, to increase it.

Lastly a conservative columnist, who I have some respect for, stated that a rise in the minimum wage would lead to job losses. While studies and data of increases don't really show that, there is a problem with that statement. His position was that a rise for goods and services reduces demand.

That is true, though there can be other factors. But when it comes to the minimum wage, the question would be do employers still make a profit with an increase in the minimum wage. Yes, yes they do. The minimum wage was much higher in the 1960s, adjusted for inflation. Employers then could pay a higher minimum wage and make a profit, but employers today cannot?

The columnist also stated that a lower minimum wage has a stimulus effect versus higher pay for m.w. workers. That is not true. As I wrote before, we are a demand driven economy and if consumers (who are also workers) aren't spending money, the economy stagnates. Employers aren't going to invest money (with good reason) if there isn't sufficient demand. Once again, demand drives the economy.

Finally the minimum wage in Australia is over $15 an hour (U.S.) with unemployment at least a couple of points lower then the U.S. According to those who oppose the minimum wage, this shouldn't happen? Or, the minimum wage is only a fraction of what employers can and will pay without it going up.



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