Is raising the federal minimum wage rate beneficial to the economy or not? We’ll take a look at who’s for and against raising the wage and how level of education affects people’s opinions.
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These facts from Raise the Minimum Wage are pretty interesting (and alarming):
$10.74 – What the federal minimum wage should have been if it kept up with inflation over the past 40 years.
$15,080 – The annual income a full-time employee would earn if he earned the current federal minimum wage.
0 – The number of states where a minimum wage employee can afford a 2-bedroom apartment working a 40-hour week.
67 – The percent of Americans in favor of raising the minimum wage from $7.25 to at least $10.00 per hour, according to an October 2010 survey.
64 in 100 vs. 4 in 100 – The chances that an adult minimum wage worker is a woman vs. the chances a Fortune 500 CEO is a woman.
$2.13 – The federal minimum wage for tipped employees, such as waiters and waitresses, nail salon technicians, or parking attendants.
Small business owners are in favor of raising minimum wage because it will put “more money in the pockets of those in their communities,” according to an interview by Secretary Tom Perez for the US Department of Labor. One of those small business owners is Amanda Rothschild who owns a small cafe in Baltimore, and she justifies the wage increase.
“Our training costs would be significantly higher if we paid lower wages and we had the kind of turnover that you typically see in a restaurant,” she explains.
Raising the wage is important for small business owners because it makes the difference between staying in business or closing up shop, which would be a lose-lose for business and for the economy.
The case for small businesses is simple: If your employees aren’t making enough to survive and people within your community don’t earn enough to afford your product or service, then there is no business. But not everyone sees things so simply, as PayScale discovered in its most recent report, Minimum Wage Debate, where 50.6 percent of the people polled were against raising the wage to $15 per hour.
Education level also plays a factor in determining what side of the coin a person falls on. According to PayScale’s research, roughly 50 percent of people with bachelor’s degrees or no degrees are for hike in minimum wage. However, the great divide seems to start at the master’s degree level of education, where we see a spike in support — 56.5 percent, to be exact — then, a huge plummet down to a mere 37.6 percent of people with MBAs in favor of raising the wage. Which group is most supportive? Surprisingly enough, those with medical degrees, with a whopping 63.6 percent in favor of raising the minimum wage to $15 per hour.
In the end, what benefits the people (or the employee), benefits the economy. Well-paid employees are happier, and happier employees means better business, and better business means a more attractive bottom line and healthier economy. Therefore, if people want to stimulate the economy and do what’s best for business, then create happier, more fulfilled employees — in other words, pay them a decent wage so they can afford a decent life. As President Obama urged in his State of the Union address, “Let’s declare that in the wealthiest nation on earth, no one who works full time should have to live in poverty.”
To see which states offer the best and worst wages across the nation, take a look at the “Minimum Wage Laws in the States – January 1, 2014” map provided by the US Department of Labor. You’ll be surprised to see just how many states are below the federal minimum wage, and which ones have no minimum wage laws whatsoever.
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