Wednesday, June 25, 2014

A Livable Minimum Wage Would Benefit Businesses

(The image above is from the website

Yesterday I discussed the ridiculous fallacy that raising the minimum wage would cause businesses to lay off workers. It wouldn't, simply because businesses will always hire the number of workers it takes to service their customers (no more and no less), regardless of what the minimum wage (or the tax rate) is.

Today, I want to discuss the fallacy that raising the minimum wage to a livable level (at least $10.10 an hour) would hurt businesses. Any business that might be hurt has deeper problems than the minimum level of wages they pay, and probably won't stay afloat whether the minimum wage is raised or not. Healthy businesses would actually be helped by raising the minimum wage -- not hurt.

This is illustrated by the experience of The Gap -- who recently raised their minimum wage to $9.00 an hour, and will raise it next year to $10.00 an hour. They said they are already experiencing positive benefits from that decision. Applications for employment at their stores had been declining, but that has now been reversed (giving them more applicants from which to choose). They also expect their employee turnover to decrease.

The truth is that businesses would benefit in several ways from raising the minimum wage to a livable level. Here are a few of those benefits:

1. Businesses would receive a greater number of applications for jobs. This would help them to hire better qualified employees, who will do a better job for the business.

2. Employees making a livable wage would not be eager to leave the job, thus reducing the turnover of employees (and saving businesses the cost of hiring and training new employees).

3. Employees making a livable wage are happier and more loyal, and that makes them more productive (which increases the profits of the businesses).

Those benefits would occur even if a business unilaterally raised the minimum wage they pay, but there is another benefit that would accrue by raising the minimum wage for all businesses.

4. If the minimum wage was raised to at least $10.10 an hour for all businesses, it would inject a huge amount of new money into the economy. And those workers receiving that higher minimum wage would need to spend that money (since they are already struggling to survive). That new money being spent would not only boost the economy, but would increase profits for the businesses in our economy.

The Republicans (and their corporate masters) like to paint the issue of raising the minimum wage as being one of workers against businesses. The corporations do this because they want the taxpayers to keep on picking up the tab for much of their labor costs, and the Republicans just don't seem to know any better. But the reality is that raising the minimum wage to a livable level would benefit both workers and businesses -- and it would benefit taxpayers by taking many workers off government rolls (such as food stamps). The only people who might not benefit are the corporate executives (who might see their outrageous salaries and bonuses reduced) -- and that is not a bad thing.

The United States government needs to raise the national minimum wage to at least $10.10 an hour immediately, and then tie that wage to the rate of inflation. It would be good for the country, and for almost every American citizen.


  1. Even if any of that was correct, and mostly it isn't, what gives you the right to interfere in private contracts between private citizens?

  2. Being an American citizen gives me the right to say whatever I want about what I think my government should do. It's called "free speech". And stating my opinion isn't interfering with any "contract".

  3. You're becoming slippery in your old age, Ted, you'll be running for Congress next!

    Let me rephrase, what gives *anyone* the right to interfere in contracts freely entered into by free citizens?

    Or to put it another way, what business is it of yours or anyone else?

  4. It is the business of every taxpayer, who pays for the government benefits these people receive because business won't pay their own labor costs. And it is the business of every decent and moral citizen with a conscience. After all, we are our brother's keeper -- even if you right-wingers don't want to admit it.

  5. "we are our brother's keeper"

    That always has a slightly sinister tone to it, sort of, 'we know best what's best for you, like it or lump it'!


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