Why We Should Raise Minimum Wage

Why We Should Raise Minimum Wage

HORTON

By John Horton

I would like to respond to those who say that “raising minimum wages can’t work.”  In today’s job market and economic environment, I find this “reality” to be highly irrational, illogical and immoral.  And, I shall expand upon my reasons and logic for opposing these views.

 

Has anyone checked out living expenses (housing, food, transportation, utilities, gasoline, clothing, medical, taxes, insurance, etc.) lately?  Believe it or not, low/minimum wage earners are affected disproportionately and disadvantageously by these everyday costs and rising expenses.  And, their cost of living is going up and their standard of living is being constantly/disproportionately lowered.  As a nation, this “economic reality” is not fair or just for them or us.

 

Just because a person is a “low wage earner,” it doesn’t mean that they are undeserving or at fault.  Most of the low/minimum wage earners that I know are honest, hardworking, caring, and dedicated people.  I sincerely believe that most (minimum wage) people really want to work and earn their money. When it comes to minimum wages, we must be careful to not become a people of “I have mine, and good luck with getting yours, too.” Oh, and I might add, all the talk about “class warfare” is a “red herring,” because the “ruling class” has already won the income-wage battle.  All of this reminds me of the “golden rule of economics”: He who has the gold gets to make the rules.

 

As the saying goes, “the rich is getting richer…and the poor is getting poorer.” To put it another way, “the world’s richest got even richer…and the wealthy are getting wealthier. (Bloomberg News, December 2014 and New York Times/Pan Research Center, December 2014).

 

According to a recent Pew Report (December 2014), the wealth gap-income inequality has reached an all-time, three decades high point for American households.  In 2013, the median net worth of upper-income families was approximately $640,000, nearly seven times as much as middle-income families ($96,500), and nearly 70 times as much as families ($9,300) at the bottom of the income ladder.

 

According to a 2014 economic report by the National Bureau of Economic Research, much of the nation’s wealth gap-income inequality is due almost entirely to the top 0.1 percent, whose share has increased from 7 percent in 1979 to 22 percent in 2012.  Conversely, the bottom 90 percent’s share of wealth has steadily decreased since about 1985-86.

 

It should be noted that America has more billionaires than any other nation.  For example, the world’s two richest persons/billionaires are Bill Gates (age 59, co-founder of Microsoft) at approximately 87.6 billion and Warren Buffet (age 84, chairman of Berkshire Hathaway) at approximately $74.5.  Moreover, it is estimated that the net worth of the world’s 400 wealthiest billionaires is approximately $4.1 trillion. (Bloomberg Billionaires Index, December 2014).

 

It has been estimated that over two trillion (possibly upwards of $4 trillion) dollars are being withheld by banks and financial institutions and investors, which could be (positively and productively) utilized for: jobs, businesses, infrastructure (roads, highways, bridges, tunnels, buildings, hospitals, schools, housing, etc.), other income-making and profit-sharing purposes, national debt reduction, and the like.

 

This sharing of the nation’s wealth would be good for the general public, big and small businesses, and the nation overall.  This would promote the general welfare and equitable uplifting of us as individuals and a nation at large.  In essence, this would go far in “lifting all boats within a rising tide.”  In my opinion, this is the epitome of “sharing the American Pie,” giving more of us an opportunity and ability to taste a piece of the (economic) pie.  In short, this is what the “American Dream” is  all about.

 

At this time, let me present some “facts” pertaining to the minimum wage situation (usually $7.25 per hour, or so:

(1)  The minimum wage has not been raised since July 2009. (Bureau Of Labor Statistics, 2014)  (Don’t you think it is about time for a raise?)

(2)  Some 16.5 million workers earn less than President Obama’s proposed $10.10-per-hour federal minimum wage. (Bureau Of Labor Statistics, 2013)  According to White House stats, a minimum wage of $10.10 would help approximately 28 million workers.

(3)  Those workers in the hospitality and leisure industry (most in food service and restaurant) make up roughly 20% of those who earn the minimum wage. (Bureau Of Labor Statistics, 2013)

(4)  In 2012, the income gap between the richest 1% and the remaining 99% was the widest it has been since the 1920s.  Incomes of the wealthiest 1% rose nearly 20% whereas the incomes of the remaining 99% rose 1% in comparison. (Congressional Budget Office Statistics, 2012)

(5)  Roughly 76% of Americans favor some kind of increase in the minimum wage, notwithstanding pro/con arguments on both sides of this topic. (Gallop Poll Statistics, February 2014)

 

To summarize:

 

Since the late 1990s, average pay in America has been flat due to relatively minimum wage increases.  Wages have been falling in recent years because raises have been so rare. Meanwhile, the stock market has been at an all-time high, recently over 18,000 points.  It is estimated that over two trillion dollars, possibly upwards of $4 trillion, are being held off-shore and in other similar accounts.  You would think that some of these vast “riches” could be utilized to generate jobs and increase wages across the board for all “workers.”

 

I firmly believe that income inequality can be significantly reduced.  Furthermore, I believe if “we” want to substantially decrease the income gap, “we” can.  Then the question, only obstacle remaining, is “how”?

 

For example, roughly 16,000 people in the U.S. have a combined net worth of approximately six trillion dollars.  That is as much as the bottom two-thirds of the population. (U.S. Treasury Statistics Report, February 2014)  Also, many of these “wealthy” people pay at a tax rate lower than the “average” wage earner.  For me, this is not fair, right or just…as a collective nation.

 

During the past three decades, the wealthiest Americans have earned a higher, more disproportionately, income than most of their world counterparts.  Meanwhile, citizens of other advanced nations (Canada, Norway, Sweden, Finland, etc.) have received significantly higher wage increases over their American counterparts.  (New York Times, Harvard University Study, and Luxembourg Income Study Database Statistical Reports, March 2014).

 

During the past three decades or more, American companies have distributed a much smaller share of their profits to the middle class and poor than similar companies in other advanced nations.  Thereby, most American “workers” are left receiving smaller wages and lower (minimum) pay.  As a result, inequality in disposal income is significantly higher in America than in other advanced nations.  (New York Times, Harvard University Study, and Luxembourg Income Study Database Statistical Reports, March 2014).

 

According to such economic experts as Dr. Thomas Piketty (“Capital in the Twenty-First Century”), this “income inequality” discourages employees to work hard and advance themselves against these economic entities and marketplace obstacles.  In effect, extremely wealthy individuals/families live off of their “riches,” for money tends to replace itself, and the past devours the future.

 

I could not agree more.  If “we” are to improve and advance as a collective nation, then something “different” must be done.  And, raising the minimum wage is one of the significant means of achieving this (overall) national goal.

 

In the final analysis, right is right and fair is fair.  Need I say more?