HIGHTOWER: "Percolate-Up" Economics
Remember all the Gloom & Doom predicted by those lawmakers and lobbyists who fought the raise in minimum wage this past summer?"Somebody's going to get hurt. Somebody loses a job or somebody closes-up shop," wailed Bob Dole himself. Rep. Robert Walker of Pennsylvania flatly proclaimed that the increase in the minimum wage "will set off an inflationary spiral that will tax every American family." The U.S. Chamber of Commerce lobbied furiously against it, moaning that any increase "will lead to a loss of jobs, hitting hardest at unskilled workers" -- thereby showing a sudden concern for the unskilled that Chamber of Commerce pooh-bahs never demonstrated before.Still, an increase was approved and, lo and behold, NONE of these dire predictions have come to pass. Instead of a loss of minimum wage jobs, there has actually been an uptick in the number of such positions. At the same time, there has been ZERO increase in wage inflation from passage of the bill.Quite the contrary, raising the minimum wage turns out to be raising worker satisfaction and productivity. Plus putting a bit more money in workers' pockets is even increasing business. How does it do that? The president of the K-Bob's steakhouse chain explained it to the Wall Street Journal like this: "Our employees are [also] our customers. And if employees have more buying power, they have a little more money to spend."Claire's Stores, a chain that retails fashion accessories agrees that paying more to low-wage workers may be producing a boom for business, instead of a bust. The customers of this Florida-based, 1,500-store chain include people who make the minimum wage, and executives credit the wage increase with helping to boost their sales by seven percent this year over last.Despite the claims of the Chicken Littles, raising wages is the best way to get America moving again.Source:"New minimum wage makes few waves" by Christina Duff. Wall Street Journal: November 20, 1996.