The Minimum Wage: Not the End of the World as We Know It

Well, they did it. The House passed a bill to hike the minimum wage for the first time in ten years.

The House yesterday overwhelmingly approved the first increase in the federal minimum wage in nearly a decade, boosting the wages of the lowest-paid American workers from $5.15 to $7.25 an hour over the next two years.The 315 to 116 vote could begin the process of ending Congress’s longest stretch without a minimum-wage increase since the mandatory minimum was created in 1938. In the past decade, inflation has depleted the value of the minimum wage to the lowest level in more than 50 years.

The bill now goes to the Senate, wherein lies the rub, you see. The Senate has its own version pending, and unlike the House bill, theirs tacks on yet more business tax breaks.

Senate Democratic leaders promise to press for a vote on their own minimum-wage legislation this month. Unlike the House-passed bill, the Senate’s would include small-business tax cuts that Democrats believe are necessary to placate Republicans and the business community and win the 60 votes necessary to break a possible filibuster.

The Pubs, their reputation and popularity squirming in the dust of their own corruption, is going to filibuster a bill to keep the minimum wage below the poverty line while fighting for more corporate hand-outs? Now there’s a realistic political strategy. What’s disgusting, though, is that there are quite a few DLC Dems who will join them.

Can we please just dispense with the argument that the minimum wage is somehow going to hurt employers? It’s not true.

LIBERTY LAKE, Wash., Jan. 9 — Just eight miles separate this town on the Washington side of the state border from Post Falls on the Idaho side. But the towns are nearly $3 an hour apart in the required minimum wage. Washington pays the highest in the nation, just under $8 an hour, and Idaho has among the lowest, matching 21 states that have not raised the hourly wage beyond the federal minimum of $5.15.Liberty Lake and Post Falls are divided by more than the state line.

Nearly a decade ago, when voters in Washington approved a measure that would give the state’s lowest-paid workers a raise nearly every year, many business leaders predicted that small towns on this side of the state line would suffer.

But instead of shriveling up, small-business owners in Washington say they have prospered far beyond their expectations. In fact, as a significant increase in the national minimum wage heads toward law, businesses here at the dividing line between two economies — a real-life laboratory for the debate — have found that raising prices to compensate for higher wages does not necessarily lead to losses in jobs and profits. (emphasis added)

No. In fact it seems to lead to more of both. How about that?

There’s nothing new here. Other studies have shown over and over again that raising the minimum wage not only doesn’t hurt business, it helps boost an area’s economy. That shouldn’t be a surprise. If the working poor make more money, they’ll spend it. Especially now, after scrabbling for decades trying to make ends meet with a paycheck that can’t even cover the basics. There are tons of things we need that we haven’t been able to afford. If we make a little more, we’ll buy some of them, and there are enough of us so that that buying-bump will make a difference.

The corporatocracy’s knee-jerk conviction that paying workers more money is somehow going to destroy their profit margins is ludicrous on its face. And make no mistake: though the corporatocracy invariably whines about how the Big Losers will be small, mom-and-pop entrepreneurs, the truth is that small businesses rarely fight minimum wage hikes. When you look at the people who are crying in their beer and wailing about how capitalism will be destroyed if employees get an extra dime an hour, it almost always turns out to be a company like StarKist that’s gnashing its teeth.

The corporatocracy’s automatic reaction is just one more sign that greed trumps reality. It even trumps profits, since we know paying workers more boosts the economy more quickly and to a greater extent than any other single factor. We also know now that Bush’s vaunted tax cuts did nothing – zippo, nada, niente – to help the economy except make rich people richer. They kept the extra money in their pockets.

So buck up, corporate weenies. You’re actually going to make more money with the hike than you’re making without it, and that’s all that’s important to you. Right?

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