Minimum Wage

America needs a staged increase of the minimum wage to $10.10 per hour.

Having a meaningful minimum wage is fundamental defense for America’s middle class. Without a floor on wages, a wage crash would occur during every economic down cycle. Businesses flooded with unemployed workers would offer less and less to fill their few openings and force current employees to take pay cuts. Spending would fall faster and hard times would last longer. That vicious cycle occurred during the Great Depression. The minimum wage and other aspects of the social safety net put in place in the 1930′s have been effective at protecting our middle class.

As a nation, we learned during the Great Depression that failure to have a minimum wage and a broad social safety net allows the economy to risk deep tailspins once it starts to fall into a hard recession. Students of that period of economic history understand just how difficult it is to get out of those tailspins if they are allowed to build momentum. Without protections, the Great Recession of 2008-9 would have been far worse, probably rivaling the Great Depression in depth and duration.

The minimum wage needs to be sufficient to raise the full time worker out of poverty. People who work should see rewards from that work if we are to have a prosperous and stable society. The current level of $7.25 is hard to live on if the worker is living independently. As a nation, rewarding work provides a broad social good and is worth accepting the necessary distortions in the free market.

Any increase in the minimum wage will be immediately returned to economic growth as those who receive minimum wage need to spend all they receive. Any increase in spending will create more demand for goods and more jobs. Economic studies confirm the positive effects of increasing the minimum wage.

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