The American Agora: For a Better Economy, Raise the Minimum Wage

By Christopher Fenn
The American Agora, April 2, 2018

Reflecting a national trend, Washington DC is scheduled to raise its minimum wage later this year from $12.50 to $13.25 per hour, or a 6% increase. This minimum wage hike was set forth in a 2016 bill signed by Mayor Muriel Bowser that laid forth a plan for Washington to gradually raise the minimum wage to $15 per hour over a period of four years by increasing the minimum wage approximately $0.70 per year. While dozens of states and cities throughout the United States have adopted similar measures, the issue remains significantly contentious along party-lines. This partisan debate has been highlighted on Capitol Hill, where Congress has been unwilling and unable, since 2009, to increase the federal minimum wage from a mere $7.25. Similarly, it was an issue of contention during the 2016 Presidential Election. When asked by Fox News anchor Neil Cavuto during a debate whether they supported increasing the federal minimum wage, Marco Rubio, Donald Trump, and Ben Carson assessed that the current federal minimum wage was already too high and raising it would be disastrous and would lead to higher unemployment rates. Yet, despite these and similar claims made by Republicans, a significant amount of empirical evidence suggests that increasing the minimum wage is beneficial to such workers and to the economy in several regards. ...

Second, according to analyses from the Economic Policy Institute and Business For A Fair Minimum Wage, increasing workers’ wages fosters higher productivity amongst such workers. ...

Third, several economists and major financial institutions, including the International Monetary Fund and Merrill Lynch have asserted that higher wages are essential for increasing the speed of a nation’s economic growth. This relationship between the speed of economic growth and higher relationships can be attributed to the fact that higher real wages will give greater purchasing parity to consumers, thus causing an increase in consumption, and, in turn, gross domestic product (GDP). ...

Simply stated, increasing the minimum wage is beneficial to workers, productivity, and economic growth, while producing minimal to no negative effects on unemployment rates.

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