Why Can’t Our Economy Grow? Because We Can’t Increase the Minimum
The debate to drive up the minimum wage continues in America; many are calling for an increase from the current $7.25 per hour to over $10.00 per hour. While I totally agree the minimum wage established in July 2009 needs to increase, I also warn that a higher minimum wage will likely mean higher prices at the cash registers, as there is absolutely no chance companies will absorb a mandated increase.
So what happens is an extremely tricky situation: we want to increase the living standard of the so-called working poor on one hand, but on the other hand, we know that raising the minimum wage will ultimately end in higher prices for the consumer—meaning the working poor aren’t likely to see any real increase in their standard of living.
Washington State is currently paying the highest minimum wage in the nation at $9.19 per hour, but there’s a move in beautiful Seattle to drive the wage up to $15.00. (Source: Associated Press, “Campaign seeks to push Seattle minimum wage to $15,” CNBC web site, August 19, 2013.) Now $15.00 per hour may not sound like much, but it’s a whopping 63% higher than the current minimum wage. In my view, while I’d like to see the lower-income workers get more money, a 63% increase is just not realistic.
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