Many of the largest low-wage employers (e.g. McDonalds, Wal-Mart, etc.) are posting record profits while relying on billions of federal dollars to supplement their employees income just so that they might be able to eat (McDonalds even has an online tutorial showing its employees how to apply for SNAP). To avoid paying over-time, few low-wage employers allow even their full time employees to work more than 30 hours per week. And even then, many of them coerce employees who go over 40 hours to transfer their hours into the next week ad infinitum just to keep the total under 40 (it has happened to me at all of the low-wage jobs Ive had--at one job, I received two paychecks after I quit just so that they could make up the surplus in hours). This is obscene. Most of these companies could easily afford to pay their people a living wage, they just choose not to because they realize that the American taxpayers will make up the difference. This problem only amplifies the rapidly growing wealth inequality in this country. That is, rich people dont feel the need to pay poor people a living wage because they realize that they can get the middle class to make up the difference. Numerous studies have demonstrated that a modest increase in the minimum wage does not increase unemployment (it seems not to affect it at all in either direction, as long as the change is modest). Economically, this is probably because the increase in aggregate demand increases revenues to the point that it off-sets the increase in costs. Money does not trickle down in an economy. It tends to trickle up. And the economy relies on money moving around in order to grow. When there is stagnation at the top, a little bit of money has to be moved to the bottom or else the decrease in aggregate demand will harm the rest of the economy (as is starting to happen in the United States). In other words, supply-side economics is an oxymoron. Economies are driven by demand. If we want to solve the debt crisis, increase employment, and fight poverty, it is imperative that we figure out ways to increase aggregate demand. And the best way to do that is to increase the minimum wage. To let median wages to continue to stagnate as they have for the past few decades would be economic suicide.
Posted on: Tue, 15 Jul 2014 05:41:46 +0000
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