For years, policymakers and corporate CEOs have cried foul when it comes to raising the minimum wage, saying such action is a “jobs killer” that hurts business and decreases available jobs. But a recent review of academic research by the Center for American Progress found that raising the wages of the lowest-paid workers can get the economy rolling again—and with few negative consequences.
CAP analyzed five academic studies of the minimum wage during periods of high unemployment over different geographical areas using a range of methodologies. The results are clear: when workers are paid well, quality of life increases and, on a whole, communities fare better.
A close look found no correlation between federal and state governments raising the minimum wage during periods of high unemployment and a reduction in employment opportunities.
Of 35 states that raised minimum wage during periods of high unemployment, 21 saw job increases over the next 12 months at a rate faster than the national average. Fourteen saw job growth at a rate below the national average.
Increasing the minimum wage “reduces turnover and helps employers compete on a more level playing field, forcing firms away from a low-road, low-human capital investment model to one where workers stay attached to the workforce and employers make stronger investments in training,” writes CAP. “Taxpayers are better off because they have to bear fewer of the negative externalities from low-road employers—such as the cost of food stamps and Medicaid.”
Raising the minimum wage also raises economic opportunity for women. That’s because 62 percent of low-wage workers are women.
“Women are disproportionally harmed by a low minimum wage because women—and especially women of color—are much more likely to hold low-wage jobs than men,” says CAP. “In short, the minimum wage isn’t just a worker’s policy—it’s a women’s policy.”
Those statistics become clear when one looks at just who has gained wealth over the last four decades. From 1968 to 2010, incomes for the top 1% increased by 110%. By comparison, minimum wage has fallen by 31%. A full-time worker earning the federal minimum wage rate of $7.25 per hour makes just over $15,000 a year—well below the poverty line for a family of four.
A raise in the minimum wage would put more money in the pockets of working people and boost consumer spending, which drives 70% of our economy.
Tell Congress that the 99% needs a raise. Tell Congress to increase minimum wage today.