Blogs » Politcs Plus » It's Time to Increase the Federal Minimum Wage

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I don't see companies boosting wages on their own in this economy because of economic theory that we adapted to in the 1980s. The other day I heard Speaker Boehner repeat the conservative talking point “if you increase the costs of employment, you get less of it.” That has never been proven but it continues to be taken as fact by some. If raising the minimum wage is a job killer; then do we need to lower it? I don’t think so.

The myth that higher wages and health care are job killers has been proven wrong time after time. Vermont has one of the highest minimum wages in the country, yet their unemployment rate continues to be below national average. States are starting to raise their minimum wage because they know it puts more money into the consumer’s pockets and gets them off public assistance. There’s no reason taxpayers should be subsidizing the cost of health care for large retail companies.

We used to take conservative theories and run with them, but now economists are actually putting those theories to a test. We have learned that the cost of giving McDonald employees a decent living wage with benefits will only add 67cents to the cost of a Big Mac. We have also learned that Costco can pay 3 times the minimum wage, offer good benefits and still stay competitive with Wal-Mart. In the past 40 years, CEO pay as compared the workers pay has gone from a ratio of 20:1 to 500:1, so it doesn’t take a genius to know where the basis of income inequality comes from.

Henry Ford, a staunch conservative, recognized that he would prosper with a strong middle class. In 1914, Mr. Ford established an unheard of $5.00 a day minimum wage in his factories. That $5 a day made the Ford Company much more attractive and made Henry Ford a billionaire. Morale shot up; employee turnover sharply dropped, and, most important, productivity surged. Mr. Ford made a free- market decision and not one mandated by the government. Mr. Fords’ conservative business colleagues did not follow suit allowing Henry Ford to become a billionaire and but his decision also brought up his upper-class friends. We need to start doing something about the income inequality, but I don't think the answer will be come from the supply- siders because they will continue out sourcing, employing fewer workers and using more technology to make profits for their shareholders. That's good for my portfolio, but it doesn't do a thing for my middle-class working friends, relatives and neighbors.

Minimum-wage jobs used to be for entry-level workers such as students but today those jobs are being held by people raising a family. The median age of these workers is 26, and they make $15,000 a year, if they work full time. I heard a conservative say that perhaps we could exempt the employer from paying the minimum wage increase to students as a way to keep those jobs open for them. Excuse me for being a skeptic, but I think employers would then opt for students filling those jobs.

Yesterday, it was reported that we added 203,000 private-sector jobs in November. Gross domestic product rose at an annual rate of 2.8% in the third quarter, up from 2.5%. That’s the best in five years. The stock market is at record breaking highs and the Fortune 500 companies still have $2 trillion in cash reserves, so it’s not as if they will go into bankruptcy by increasing the minimum wage. If not now, when?