Top 5 Reasons Why Raising the Minimum Wage Is Good for You and Me
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Today, high incomes come from the financial sector capturing an increasing share of national income and using it to shuffle financial assets in the financial markets casino which adds about zero to productive output.
An increase of a couple of dollars per hour or more in the minimum wage could make huge improvements in the difficult existence of the working poor, perhaps allowing them to exit the debt treadmill and stand a better chance of eventually rising into a revitalized middle-class. Admittedly, corporate profits might suffer a little and some businesses at the lowest end might disappear. That said, corporate profits as a percentage of national economic output are already at an all-time record levels. And it's questionable whether such levels of profitability can be sustained. Firms have lots of unused capacity lying around because people can't afford to buy products and services. Sluggish sales growth is directly connected to lagging wage rates.
At the same time, dependence on food stamps has surged by over 14 million over the same period. And “financial engineering” has helped to create a significant escalation in debt being borne by the private sector, particularly consumers. Surely we need a better model than that?
4. Protects Workers From Abuse: A higher minimum wage would also help to mitigate the abusive, exploitative working practices of a number of employers, who take advantage of the currently low minimum wage to seek cut-rate help. Such employers often use undocumented labor, which further undermines America’s working poor.
5. Justice for Working Americans: Most of all, a big jump in the minimum wage would be a reparation. Because let’s be clear: class warfare has already been undertaken on behalf of the 1 percent. The past 30 years have witnessed a dramatic redistribution of national and personal income in favor of profits for the rich. At the same time, this period has been associated with a dramatic decline in the performance of the US economy. To raise the minimum wage would be literally the minimum we could do for those who have suffered from the economic crisis: the working population. It would be an act of justice.
Marshall Auerback is a market analyst and commentator.