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Tuesday, March 11, 2014

Why a higher minimum wage pays us all (guest post)


From none other than the very, very business-friendly Bloomberg News:
Economists and government officials endlessly speculate on the impact of raising the $7.25 federal minimum wage.
Most recently, a report by the nonpartisan Congressional Budget Office said that raising the federal minimum wage to $10.10 an hour might cut employment by 500,000 workers. That is balanced by the projection that higher pay could also boost about 900,000 people out of poverty.
But some places in the U.S. already have real-life experience with raising their minimum wage.
Washington state, for example, has the nation's highest rate, $9.32 an hour. Despite dire predictions that increases would cripple job growth and boost unemployment, this isn't what happened.
At 6.6 percent, the unemployment rate in December was a click below the U.S. average, 6.7 percent, and the state's job creation is sturdy, 16th in the nation, according to a report by Stateline, the news service of the Pew Charitable Trusts.
In Seattle, where metropolitan-area unemployment is 5.3 percent, that $9.32 sounds so yesterday. The mayor and City Council are practically in a race to see who can move faster and with more gusto to increase the minimum wage to $15 an hour.
Safe bet: They will make a move by summer. Seattle could then surpass San Francisco, another city that fancies its role as a laboratory. The City by the Bay's is the highest (not counting airport workers), at $10.74 an hour, and officials are discussing a new rate of about $15.
While Seattle and San Francisco are unrepresentative of the nation, they have helped pressure their states to raise their minimum wages. Fifteen years ago, Washington voters approved an initiative giving the lowest-paid workers a raise almost every year, with increases now tied to inflation. Those increases produced the highest U.S. rate, although California could lap that in 2016 when it hits $10 an hour. Washington Governor Jay Inslee and Democratic legislators have been pushing to raise the statewide amount to almost $11 or $12 an hour, but that now seems unlikely this year.

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