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Houston, TX: Want to stimulate the economy? Raise the minimum wage
Your Houston News
Marc Croes, Kingwood Area Democrats

January 6, 2012
View the Original Article


The minimum wage has been around since the 1890s when New Zealand enacted the first law. The minimum wage became law in the United States in 1938, when Americans recognized the need to provide an incentive for the unemployed to seek work and lift themselves out of poverty.

Without the minimum wage law, many jobs did not pay enough for a worker to support himself. There was no incentive to take an entry-level or unskilled job, and many Americans turned to the black market economy and a life of crime to earn a living wage.

Prior to the minimum wage laws there was no job security. It was common for an adult to lose his job to a teenager, who would work for less.

The current economy is slowly improving, but everyone would like it to move faster. The traditional way to stimulate the economy is to increase government spending, but we are already spending too much. Cutting taxes to stimulate the economy worked for a while but caused the deficit to balloon far more than any spending increase would have done.

Efforts to cut spending have degenerated into partisan bickering, with each side trying to protect its own sacred cows while cutting the opposition’s sacred cows. What can we do?

We can increase the minimum wage. President Obama met with national business leaders in 2011 and asked them why they were sitting on record piles of cash but not hiring. The business leaders blamed it on a lack of customers. Businesses were not hiring because consumers were not spending.

Raising the minimum wage will put some of that dormant corporate cash into the pockets of people who have basic needs, resulting in increased consumer spending. Increased consumer spending will increase tax revenues, increase corporate profits, reduce unemployment and help many Americans claw their way out of poverty.

Raising the minimum wage has always resulted in increased worker productivity, which will further increase corporate profits.

Did everyone get that? Increasing the minimum wage will increase tax revenues and reduce the deficit without a tax increase or a spending cut. It’s certainly not a cure-all for our problems, but it’s a fairly painless step in the right direction.

Why haven’t we done it already? Business leaders noisily oppose the idea of raising the minimum wage, claiming it would hurt corporate profits and increase layoffs. Those are possibly short-term truths, but keep in mind that those huge corporate executive bonuses are tied to short-term profits. Over the long term those are empty threats.

Business leaders have always opposed minimum wage increases since the first law was passed, and history tells us a well-timed minimum wage increase has always been of great benefit to the economy and millions of working Americans. Let’s ignore the corporate noise, learn the lessons from our history and do what history tells us will work.

Let’s help millions of our fellow Americans. Let’s help our economy. Let’s raise the minimum wage. It’s a no-brainer.