By: Joseph Chirdon
Blog Category: Minimum Wage and the Economy
The Fair Minimum Wage Act of 2013 (Act) reignited the minimum wage debate. For decades the minimum wage has failed to keep pace with inflation, causing a steady decline in buying power for minimum wage earners. So, what affect will raising the minimum wage to $10.10/hour, as the Act proposes, have on the economy?
The Economic Policy Institute (EPI) believes raising the minimum wage will help spur economic growth. It estimates the Act will increase wages for 30 million Americans. Low-wage employees are more likely than employers to spend money immediately. Therefore, a monetary shift from employer to employee, over the Act’s implementation, is estimated to increase economic activity by $32.6 billion. Demographically, the EPI estimates, of the employees affected by the Act, 56 percent are female, 46 percent are a racial minority, and 25 percent are parents.
The EPI concluded that the Act would grow the economy, add jobs, and help those impacted most by the Great Recession. The disenfranchised deserve the opportunity to earn a living wage, even if higher prices are passed to the consumer. After all, “the true measure of any society can be found in how it treats its most vulnerable members.” – Mahatma Gandhi
The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race.
Raising the Federal Minimum Wage to $10.10 would Give Working Families, and the Overall Economy, a Much-Needed Boost, Economic Policy Institute, available at http://www.epi.org/publication/bp357-federal-minimum-wage-increase/.