While the Republicans in Congress do their best to do their worst to the American people, the core problems hurting most of the American people burrow deeper. There are short term and long term troubles and getting a vote to address even one of these issues in Congress seems hard enough to accomplish with Republican obstructionism continuing.
But what if there was one vote that could be held, one campaign that could be focused on to pass one law that if passed, could help with many of our most serious problems?
And what if that one law was already very popular with the public and even had some Republican support?
There are an array of financially-based problems that plague our nation. Unemployment, stagnant wages, poverty, jobs that don’t pay a living wage, growing inequity between workers and their bosses, cuts to SNAP (food stamps) and other poverty programs, the deficit, Medicare and Social Security gradually approaching inadequate financing and a sluggish economy to name many critical areas.
What can be accomplished isn’t extreme or far-fetched, it wouldn’t be an instant cure for all the economic ills mentioned above that afflict us…but it could help substantially in all of those areas.
And it’s as simple as Congress voting to increase the national minimum wage to $15 an hour.
We’ve heard the same dishonest wailing from the pro-business Republicans, “It will kill jobs!” “The price of a burger could go up 10%!” “Keep government out and let the free market decide!”
However, history has only proven that raising wages increases jobs because it puts more money in the hands of people who spend that money, buying more goods and services which requires businesses to hire more people to manufacture more goods and provide services. This is another issue where there is no justifiable equivalency for those opposed to it (despite the media’s need for there to always be two sides to an argument, sometimes there isn’t a strong enough “pro-AIDS” or “anti-fire-prevention” point of view to be placed side-by-side with the only factually backed opinion).
As we consider the impact of raising the minimum wage, we can consider just how far reaching that would be with regards to a whole host of economic issues facing the nation.
Let’s begin with some math. Now, I am not an economist but that’s not a requirement for being able to add and multiply numbers, the only requirement is an elementary school education (too bad that’s not a requirement for Republicans to be elected to Congress).
According to the U.S. Department of Labor’s Bureau of Labor Statistics, as of 2012, “…1.6 million earned exactly the prevailing federal minimum wage of $7.25 per hour. About 2.0 million had wages below the federal minimum.”
That’s 3.6 million Americans earning minimum wage and lower. Though there are many more Americans earning less than the minimum, let’s help out the adversaries of this proposition and only assume the average hourly wage for this entire segment of the workforce is around $7.00/hour.
Also according to the BLS, the average American between the ages of 25 and 54 works and has related work activities for about 8.8 hours a day (part timers and over-timers apparently balance each other out). Here too, let’s try to underestimate the amount of hours worked each day by minimum wage earners and use an average of 6 hours per day work day which would be 30 hours per work week (some employees work 20 hours per week because their employers are trying to skirt the Affordable Care Act provisions mandating health insurance for those working more than 20 hours a week but studies show this is not pervasive).
Now let’s start mathercizing. If a minimum wage increase added an average of $8/hour for 3.6 million Americans who worked an average of 30 hours/week, that means that each week there would be $864 million more being paid each week to that working poor segment of the U.S. workforce, around $3.75 billion per month and around $45 billion per year…flowing to those most in need who would be spending most of that back into the economy.
What would be the domino effect from that?
With a 12.5% tax on wages, the Social Security trust fund would receive an additional $5.6 billion per year. Not enough to wipe out its annual deficit but enough to cut it by up to 10% per year and extend the programs life much farther into the future (I wouldn’t want to give Republicans a big reason to vote against a minimum wage increase but if we had a Democratic Congress, I would also like to see a repeal of the Social Security Tax cutoff added to the bill and then in combination, we probably would eliminate that deficit).
Medicare collects a 2.9% tax so that means an additional $1.3 billion into their coffers annually.
The U.S is projected to spend $76 billion on SNAP (food stamps) spending in 2013. A big chunk of that spending would be eliminated as workers could afford to buy enough food for their families. And instead of our tax money going to subsidize Walmart, McDonalds and the rest of the corporate employers who pay so poorly that workers can’t afford their expenses, these corporations would be paying sufficient wages and freeing American taxpayers from that burden.
Consider all of the government programs related to helping those in poverty that would have less demand and require less spending of tax dollars when the working poor are no longer earning at poverty levels. The Republicans claim that the most important thing is the deficit, imagine how quickly it would fall with this kind of spending slashed and tax revenue increased by the jump in income.
And with $45 billion back in the consumer economy annually (instead of in corporate profits that are simply invested in markets and funds internationally), the demand for goods and services would increase so jobs to provide those would increase…and at the $15/hour minimum wage, new jobs would generate even greater income, spending and job growth.
So in this one vote which is already a winner with most Americans, raising the minimum wage to $15/hour would cut the Social Security and Medicare annual deficits, cut the federal deficit, reduce unemployment and unemployment insurance benefit payments, bring millions up out of poverty, reduce spending on welfare and poverty programs, fight economic inequality, protect American taxpayers from subsidizing major corporations who underpay their employees and greatly stimulate our national economy. Also consider what all that new income would mean to cities and states, greater spending on education, police and fire, infrastructure repair, etc.
Corporations like McDonalds moan about how the price of a Big Mac could go up .50 cents if the minimum wage was increased. Or jobs would be lost (again, studies show this is just plain false). Even though these arguments are wholly dishonest because the expense for hourly employee payroll for major corporations is a nominal percentage compared to all their other expenses (and therefore the percentage of added expense an increased minimum wage would be to these mega-corps is nowhere near the massive percentage increases they claim they would need to apply to their products or services).
In fact, there would be an economic boom especially in the businesses like McDonalds and Walmart that have a big customer base in the very demographic that would have a lot more money to spend.
And even if we bought into the lies about how prices would go up on big corporations’ products…what American would refuse to pay an extra few cents for a burger at McDonalds or a pair of sneakers at Walmart if it led to a better economic times that benefited them in a much bigger way than saving .50 cents?
This is a potent issue for the Democrats in 2014. There is a rising discontent among Americans at the growing, massive gap between the wealthy and everyone else. Protests have cropped up all around the nation at fast food restaurants and corporate stores that don’t pay a living wage. The amount of people in poverty is growing and as is the number of people slipping out of the middle class. People are worried that Social Security and Medicare will be either privatized and killed by Republicans or go bankrupt from neglect. Many things need to be done and we have a Republican Party in Washington that wants to pass as few bills as possible.
Well…if one bill could get all the weight thrown behind it to be passed, I can’t think of one that would have a more profound impact on our economy, our society and everyone in the nation than raising the minimum wage to $15.