A New Economic Study Proves Why We Need To Raise The Minimum Wage

minimum wageIf you believe conservative pundits and politicians, you probably believe that the poorest Americans are where they are not because we should raise the minimum wage, but because they’re lazy and don’t want to work. There’s hardly a day that goes by when you don’t hear the talking heads at Fox News parrot the tired old clichés about how America became great because of hard work and we’re falling apart as a country, immigrants are taking our jobs, and liberals want to give all your money to black lazy people in the form of welfare and food stamps.

Our country is failing in many ways, but it isn’t because of a lack of hard work. America’s continual problem with poverty isn’t due to laziness, it’s because we aren’t paying the working poor enough. Now a new study from the Economic Policy Institute confirms what people like Bernie Sanders and Elizabeth Warren have been saying for years – we need to raise the minimum wage and pay American workers more. Here’s the conclusion of their study, which you can read in its entirety at the link below.

That the poverty rate has remained stubbornly elevated over the last three-and-a-half decades is simply a symptom of an increasingly unequal economy, marked by nearly stagnant hourly wages for the vast majority of the American workforce. The elevated poverty rates we have seen since the 1980s are not the sad outcome of inevitable and irreversible changes in the economy, but of policy choices that have weakened the position of low- and moderate-wage workers while putting more leverage in the hands of those with the most economic power.

Despite the importance of expanding the tax-and-transfer system to reduce poverty and boost incomes for low- and moderate-income Americans, if nothing is done to change the policies that have led to elevated unemployment and increasing wage inequality, income inequality and poverty will continue rising. This logically flows from the fact that if increased inequality continues to suppress hourly wage growth for the low-wage workforce, we will need more tax credits and more transfers each year to simply keep after-tax income inequality stable—let alone reversing the upward income and wage redistribution of recent decades. (Source)

The increasing economic disparity in the United States isn’t because the minimum wage is keeping companies from hiring more people, something I’ve actually heard some conservatives say. It’s not because we haven’t given enough tax breaks to the wealthiest people in this country, a tired old message Republicans have been selling us since the beginning of the Reagan years. Our economic situation comes from the fact that too many Americans are making too little, and despite what conservatives are saying, businesses have no reason to hire workers if people can’t afford to buy their products.

Raising the minimum wage alone won’t fix the problems our economy is having and it won’t lift everyone out of poverty, but it is still an important step. Yesterday, Los Angeles joined Seattle and San Francisco in voting to raise the minimum wage to $15 an hour by the year 2020 and other major cities are considering doing the same. The minimum wage currently has not been properly adjusted for inflation and hasn’t been in years. In 1968, adjusted for inflation, the minimum wage was worth nearly 50 percent more than it is today.

Conservatives will argue, with some merit, that raising the minimum wage overnight will cause a lot of economic issues, but it won’t be a problem if it is raised over a gradual period in order to allow the market to absorb this change. More money in the hands of more Americans isn’t going to happen via trickle-down economics. If giving more tax breaks to the richest people actually helped create jobs that paid well, we wouldn’t be having this conversation right now.


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