Could You Raise Your Kids on Less Than $15,000 a Year? Millions of Parents Are Forced to Learn How
Continued from previous page
The one simple step that would immediately add juice to the consumer economy (which accounts for two-thirds of America's economic activity) is to do the one thing that boneheaded lawmakers adamantly refuse even to consider: Raise the spending power of millions of low-wage workers by hiking the legal minimum wage.
How high? Raising it to $10 an hour would elevate 30 million hardworking Americans now paid a poverty or near-poverty-level income. [NOTE: In terms of what $10 buys, this would lift the value of the minimum wage only to what it was back in 1968, when worker productivity was only half of what it is today.] Importantly, while it would still be tough to raise a family on a $10 wage ($20,800 a year), it does move our country a lot closer to the principle that work ought to be fairly rewarded, restoring a measure of ethics to the work ethic.
Such a percolate-up solution would provide a huge and direct lift out of our present doldrums, for those 30 million hard-hit people would put this right back into the economy, buying basic goods and services they've been having to do without. A study last year by Chicago's Federal Reserve Bank found that every dollar increase in the minimum wage produces an immediate bump in the next year of $2,800 per recipient in consumer purchases of everything from kids' shoes to vehicles. The Economic Policy Institute (EPI) reported in a 2009 study that even a boost to $9.50-an-hour would result in $30 billion a year in new consumer spending.
The man from Bain
Percolate-up, however, is not a comprehensible concept among the Friends of Wall Street in either political party, including the prince of private equity, Mitt Romney. He proudly says, flashing his gleaming smile, that when he was governor of Massachusetts and was handed a minimum wage hike by the legislature: "I vetoed it." He says he'd happily do the same as president. The most important consideration in raising the wage floor, the man from Bain Capital explained in a March interview, is to "keep America competitive" --by which he means: Keep profits of speculative profiteers (like him) high. "So that would tell you," Professor Romney instructed, "that right now there's probably not a need to raise the minimum wage."
Unless, of course, you're a minimum-wage family... or the American economy.
Mitt is merely mouthing the preposterous and perverse corporate line that lifting the minimum would [prepare to be whopper-jawed] hurt low-income workers. Say what? Here it is from one of the empty suits at the US Chamber of Commerce: "It's well understood that raising the minimum wage hurts workers on the lower end of the wage scale in that it does kill jobs."
Actually, no. Numerous in-depth studies show that hiking the wage does not cause either small businesses or giants like McDonald's to rush out and slash their workforce in order to offset the relatively small cost of paying employees a bit better. To the contrary, most studies show that overall job numbers go up. Moreover, pay hikes boost both employee morale and productivity, while reducing the number of workers quitting (thus saving employers big bucks on recruiting and training replacements).
In today's Koch-headed extremist politics, however, reality is no substitute for ideological purity. Using both the "job-killer" hogwash and the right-wing's religious fervor against all things government, assorted politicos are so eager to "help" the poorly paid that they not only oppose increases, but harangue against the very existence of a wage floor. In such places as Alaska, Connecticut, Kentucky, Missouri, West Virginia, and Washington State, assorted GOP and tea party candidates for Congress have called for abandoning our nation's 74-year commitment to a legal protection against wage gouging. And two of this year's GOP presidential contenders--Michele Bachmann and Ron Paul --also joined the assault. Jettisoning the wage floor, postulated Paul, "would help poor people who need jobs." One wonders, how many of those who would get this "help" were actually consulted by the congressman, and how impressed are they with his assertion that such a move would serve "the cause of liberty."