Raising the Minimum Wage: A Very Good Idea

by Dr. Boyce Watkins

Syracuse University

I am a curious professor, a compassionate capitalist and the owner of a small business. All of these hats create a complex perspective on whether or not it is a good idea to increase the minimum wage. After all, we are in a recession, and one might be tempted to argue that any sort of pay increase would slow down our nation's economic recovery, eliminate jobs, and significantly reduce corporate profitability.

Sorry to burst those bubbles, but the data don't validate most of the above concerns.
First of all, the minimum wage was introduced during the Great Depression, the mother of all economic downturns. The Fair Labor Standards Act of 1938 was designed to ensure that the most vulnerable Americans were no longer going to be exploited by the power of big business. The Great Depression came to an end shortly thereafter, and there is no evidence that it slowed down the economic recovery in any significant way.

Secondly, the budgetary implications of minimum wage increases are not very large. According to the Bureau of Labor Statistics, only 2 percent of all men and 3.6 percent of all women currently earn the minimum wage. But while the impact on our national budget is small, the gains for those affected are tremendous: there are nearly 5 million children in families who earn the minimum wage, and nearly all of these children are going to have better lives in the advent of an increase.

 

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