18 February 2013

Raising the minimum wage will help us all

In last week's State of the Union address, President Obama proposed raising the federal minimum wage to $9.00/hour.

As expected, the right is firing back, claiming that raising the minimum wage would lead to job losses. When employers cannot afford the pay raise, they argue, they will have to lay off some workers to keep payroll costs down.

But that argument is naive and short-sighted.

The truth is that when low-wage workers are paid a little bit more, they tend to spend that extra money. This leads to increased demand for consumer products and services. So those same business owners find their revenues increasing.

Accordingly, raising the minimum wage will serve to stimulate the economy - and we all win.

But I suspect that many on the right don't want us all to win.

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