Raising the Minimum Wage (ICANB-1)

It’s probably obvious to just about anyone by now that this 2012 campaign season is going to be mostly filled with negative advertising, even on the Democratic side (and yes, dumb Republicans, it is DemocratIC—if you were describing a robot, would you say that it is robot?  No, because that sounds dumb, and so do you when you call us the Democrat party—if you want English to be the official language of the U.S., at least use it correctly…hicks).  That being the case, I think it might be good to discuss some positive things that we could actually do, politically, to get our nation’s economy going, as well as to instill more fairness and opportunity in our society. So here’s an Idea to Change the American Nation for the Better (ICANB), number 1: raise the minimum wage.

If you didn’t already know, corporations in the modern age are enjoying massive profits, despite the fact that President Obama is a socialist-Marxist who hates capitalism.  Unfortunately, these profits are not trickling down to most Americans (shocker!), and many of the stories one finds while researching the topic, is that these corporate profits are neither affecting nor being affected by the poor job market; or, that, at the very least, it seems strange to have such high profits and not see a more robust recovery.

The problem is that corporations are hoarding the cash, and because demand is low (which is what we ought to expect given that we’ve created a system that slams young people with student loan debt, eliminates unions and public sector jobs, and robs millions of middle class families of any value in their primary asset: a home), they don’t want to spend that money to increase production or expand.  Raising the minimum wage would go a long way toward solving these problems.

First off, it shouldn’t strike anyone as unfair to ask corporations to pay their employees more, given that they are obviously benefitting tremendously from their work; indeed, their record profits would be impossible without them.  But the main point is that, if we were to raise the minimum wage to say, $12 an hour (translates roughly to about $24,000 a year before taxes…I know, I know, how dare we ask for such an egregious pay raise?), we would immediately see a huge spike in demand due to the increase in salaries of so many American workers.  Even those businesses that didn’t expand would probably at least break even, because even though their employment costs would be higher, overall demand should be quite a bit higher as well, leading to more sales.  Best of all, because many millions of people would have more money in their pockets, the overall stimulative effect of raising the minimum wage would be extremely beneficial for the entire economy.

Now, I see three main arguments against doing this.  The first is that the corporate barons and business owners will say that there is no way their corporations, mid-size businesses, and/or small businesses can afford this kind of rise in the operating costs.  To allay these fears, the government should offer businesses a temporary 5-year tax break that would give them time to readjust their business model to accommodate the rise in employee wages.  This will give the stimulative effects of the change plenty of time to come to fruition, and frankly, businesses that can’t adjust to higher wages after that 5 year delay, probably aren’t all that competitive, efficient, or effective.  We are, after all, still a capitalist nation.

The second argument people will bring up in opposition to a minimum wage increase, is that this will further accelerate the rate of businesses moving out of the country, to places like Mexico, China, etc.  However, if we really think about it, this is a moot point.  Most of the businesses that would be incentivized to move to other countries because of low wages have probably already done so; moreover, many of the businesses that would be targeted by this policy, can’t move, and this is why raising the minimum wage would be so brilliant for this country.  See, we are a country with a massive number of people employed in low paying, white collar jobs or service industries.  Think of all the service employees that work in fast food or retail alone, at companies like Target, McDonalds, Home Depot, Walmart, etc., that right now receive minimum wage.  If we actually paid these people a decent wage (and honestly, I don’t know if you can even call $12 an hour decent), they would have extra money to buy those very services and products they sell, rather than eking out a living barely large enough to survive.

The third argument against raising the minimum wage is that businesses will simply pass on the cost increase to consumers.  Again, if we really think about it, this is a moot point.  People shop at Target, Home Depot, and Walmart because they’re cheap.  If retailers suddenly raise their prices, people will spend more of their money at small or mid-size businesses, or other businesses will find a way to continue to employ people while not raising prices. Think of it this way: Costco is dirt cheap, even though they pay and compensate their employees well, and they’re able to stay cheap because they have a smart business model.  The bottom line is this: as long as there is demand for the kinds of things Home Depot, Walmart, Target, and other retailers sell, someone will find a way to meet that demand.  If those businesses can’t do it, too bad; if we’re truly a capitalist country, we shouldn’t have to baby our largest corporations so that they can succeed.

There are two more tertiary benefits to raising the minimum wage as well: One, government tax receipts would go up, which would allow us either to invest in infrastructure and education, or pay down the federal deficit. See, if we’re paying people more, they’ll be contributing more in taxes, helping our federal and state governments that are right now starving for revenue.

Two, it would raise the level of economic competition, which would be good for both business and consumers.  If businesses can no longer compete simply by paying low wages, but are actually forced to become more efficient, this will open up opportunities for entrepreneurs and innovators to find creative solutions to the challenge of higher employee wages, and potentially, dynamic new business models.

Thus, raising the minimum wage would be beneficial on a number of levels, and would directly remedy one of the biggest drags on our economy: low consumer demand.  It would be good for business, good for consumers, good for government, and cumulatively, a huge boost for the U.S. economy.  Plus, as anyone can see, the arguments against such a move can easily be addressed, especially when the benefits so greatly outpace the potential negatives.

Let’s raise the minimum wage.  Idea to Change the American Nation for the Better (ICANB), number 1.

About The Author: Jay Scott

Comments

  • Reply dishsoap

    Qoute: “the fact that President Obama is a socialist-Marxist who hates capitalism”

    you are one sick puppy

  • Reply Nestucca Jackson

    It’s called satire–that’s what all the right wing nuts call him, isn’t it?

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