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Raising the Minimum Wage Would Reduce Poverty; the GOP Thinks "Tough Love" Is Better

How Much Should You Get Paid to Work Here?
How Much Should You Get Paid to Work Here?
Photo by Bryan Allison

If you've been driving around in just about any major American city, you have probably seen strikes (of a sort) by fast-food workers -- who generally make minimum wage which is currently $7.25 per hour -- asking for a raise. And, inevitably, this has set off a political debate about whether we should raise the minimum wage.

Before wading in, let's help make sense of the issue with some background facts. If you worked full-time at a minimum wage job you would make $15,080 over the course of a year. In 2012, the poverty threshold for a single person was $11,945. For a family of four with two children it was $22,283. Sixty-four percent of those earning minimum wage are women. Ponder those figures for a second.

With that factual background, here's where the political fight stands: the Democrats want to raise the national minimum wage to $10.00 in 2014. One California conservative/libertarian businessman wants to raise California's minimum wage from $8.00 to $12.00 per hour. The vast majority of economists believe that raising the minimum-wage would reduce poverty, even those among those economists who do not support raising the minimum wage (for other reasons).

House Republicans, however, do not support raising the minimum wage. Doing so would hurt, according to one, "the very people we're trying to help." The GOP's line of thinking is this: if we raise the minimum wage, small business-owners will be financially squeezed because of increased labor costs, they will cut jobs and the very people you're trying to help will be hurt because now there are less minimum wage jobs to go around.

Much like supply-side "economics" or Reaganomics -- something no one except right-wing partisans still subscribe to -- this reasoning has the virtue of sounding reasonable, perhaps intuitive. And much like supply-side economics it is also sophistic. Instead, small raises in the minimum wage have been shown to have little to no impact on employment, at least according to many economists (David Neumark doesn't think this is the case, so economic conservatives love to cite him). Anyways, we also know that raising the minimum wage has the advantage of "boosting incomes of the poorest and reducing extreme poverty."

In the wake of the Great Recession, the incomes of the top 1 percent grew 31 percent from 2009 through 2012. Yet, even with a proposal that popular among the majority of Americans, the Republicans have so tied themselves to a Ayn Randian economic outlook that it is that it is a political struggle to raise the minimum wage $2.75 when the vast majority of economists agree that doing so would reduce poverty, especially among those who are really poor. How did this become a mainstream view of one of our two major political parties? Don't even get me started.


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