U.S.A. The state of Connecticut has raised the minimum wage to over $10. This may prove to be a very significant victory for workers in a country that has decimated its working class for the past 30 years. If successful, this should be used as a model for stimulating economies throughout the United States.
The economic arguments for an increase in the minimum wage have been made time and time again. More recently, in a study by Arindrajit Dube entitled “Minimum Wages and the Distribution of Family Incomes,” he found that, for example, if you were to increase the minimum wage, which is $7.25, by 10% to $8, you would decrease poverty by 2.4%. Furthermore, in an article in The Washington Post, Mike Konczal uses these findings to make the argument that raising the minimum wage to $10 an hour would reduce the number of people living in poverty by 4.6 million.
These economic arguments are very strong, but the moral argument for raising the minimum wage can be even more convincing. A cursory look at statistics on income inequality in America should be all it takes for someone to think that the minimum wage has to be increased. If any politicians argue for anything other than this then they should not be allowed in public office because they obviously don’t have the interests of the people in mind.
There is a pernicious undertone throughout many of the arguments made against minimum wage increases which speak to the state of much of politics in the United States, with some even being so bold as to claim a kind of moral stance against it. Many of these arguments center around incentives, especially the notion that increasing the minimum wage would be a disincentive for low income Americans to successfully earn a living. This viewpoint shows a kind of obliviousness to how hard life is for those on incomes that barely pay for things even those on middle class incomes take for granted.
There is also a “let them eat cake” mentality from those people arguing against increasing the minimum wage. They argue that businesses shouldn’t be forced to increase wages by the government because it will cost too much and lead to higher unemployment. Writing in the Los Angeles Times, Kevin Hassett and Michael Strain of the American Enterprise Institute make this exact point. This is an argument that highlights how those at the top have no empathy for those they employ on low incomes. It is also an argument that suggests that under an even less regulated market, wages would probably be much lower. In addition the businessman Peter Schiff made the incredibly insensitive and crass statement that “you’re worth what you’re worth” in an interview with the Daily Show earlier this year.
Over the past 30 years, politicians have increasingly adopted the view of financiers and other moneyed interests who pay for their campaigns. The rich are allowed to keep all their money; if only they would be generous enough to give some of it to those less fortunate than themselves. “Trickle down” economic arguments have been shown to be a fallacy. Connecticut has made a move to alleviate at least part of the problem, and if the United States is ever going to be a country of opportunity again, the rest of the country needs to follow suit. The free-market fundamentalism espoused by people like Peter Schiff must be drowned out with level-headed facts in order for actual progress to be made in this country.