Raising minimum wages would benefit economy
FREDDIE ALLEN | 10/27/2014, 6:47 a.m. | Updated on 11/10/2014, 2:25 p.m.
WASHINGTON – Raising the minimum wage to $10.10 would likely save taxpayers $39 billion in spending on safety net programs per year, according to a new issue brief by the Economic Policy Institute.
Researchers at EPI, a Washington, D.C.-based think tank focused on the needs of low- and middle-income families, also found that “more than 1.7 million American workers would no longer rely on public assistance programs,” if the minimum wage were increased.
David Cooper, an economic analyst for EPI and the Economic Analysis and Research Network, said that the value of today’s federal minimum wage of $7.25 lost nearly 25 percent of its worth since the 1960s.
Raising the minimum wage would help to close the income gap between Blacks and Whites, because Blacks hold a disproportionate amount of the low-wage jobs in the labor market.
A report published in EPI’s “Unfinished March” series, a collection of reports that revisited the goals set during the 1963 March on Washington for Jobs and Freedom, found that if lawmakers had established the $2.00 minimum wage that the marchers asked for, “today it would be worth $13.39 – a far cry from today’s $7.25.”
Cooper said that the report looked at Medicaid, the Earned Income Tax Credit, the Supplemental Nutritional Assistance Program, Low Income Home Energy Assistance Program, food stamps, the food program for Women Infants and Children, the Section 8 Housing Choice Voucher program and the Temporary Assistance for needy families.
According to the report, “roughly 45 percent of workers likely to get a raise from an increase in the minimum wage to $10.10 receive benefits from at least one means-tested public assistance program, either directly or through a family member.”
Cooper said that most of those programs were meant to be temporary support for people that had fallen on hard times or suffered some unexpected change in their income.
“They were not intended to act as long-term subsidies to employers so that businesses could get away with paying poverty-level wages,” Cooper explained. “But today roughly half of public assistance dollars for these programs go to working families and roughly half of the workers in those families that receive benefits are working full-time.”
In 2014, Dēmos, a public policy group aimed at reducing political and economic inequality, reported that, “the compensation of fast food CEOs was more than 1,200 times the earnings of the average fast food worker,” in 2012.
“Accommodation and Food Services [CEOs] earned 543 times the annual income of the average worker in the sector – the highest CEO-to-worker ratio of any sector in the economy in any year since 2000,” the Dēmos report stated.
Dēmos also reported that the food preparation and retail jobs are among the top five occupations expected to grow through 2022.
“The increasing reliance on employment in these highly unequal industries will make it harder for working people to share in the gains of economic growth as more and more income becomes concentrated at the top,” the Dēmos report said.
A 2013 report by The Committee for Better Banks, a group that advocates for bank workers’ rights, said that bank worker wages are so low that roughly one-third of tellers or their family members “receive some sort of public assistance nationwide.”