In Colorado, a proposition on the ballot this fall sets the stage for raising the state's minimum wage to $12 by 2020. Now, knowing what I know about wages and the cost of living, that doesn't seem at all unreasonable to me. Hell, from what I understand you can make $11 an hour working the line at Arbys or Good Times Burgers. I can't fathom how this is undoable by businesses if fast food can do it. And now the voters of Colorado have some evidence. A new study by DU indicates that hiking the minimum wage will help, not hurt, the state's economy:
Lifting Colorado’s minimum wage from $8.31 an hour to $12 an hour would pump $400 million into the state economy and raise living standards for one in five households — all with minimal impacts on inflation or total employment, according to a study released Tuesday from the University of Denver. “It doesn’t get people to self-sufficiency, but it is an important step in that direction,” said Jennifer Greenfield, an assistant professor at the DU Graduate School of Social Work and co-author of the study, which was a collaboration between the Colorado Women’s College at DU and the Women’s Foundation of Colorado.
4 comments:
Just one question. Where would the 400 million come from?
Well, obviously, it would come from consumer spending, Mike. In an economy that is comprised of 80% of consumer spending, it is most efficient to have more money in the hands of people who will regularly, even daily, pump it directly back into the economy by spending it. The investor class doesn't do that to the extent that working class people do ... and must. For example, as McDs has raised its price for a premium burger from $2.50ish to $5.00ish, the minumum wage has remained $7.25. So the business and investor class is making double the money, but not spending it daily. The workers would.
So, there's your econ lesson for the day.
Mike, apparently you missed the question, let me rephrase it.
Where would the 400 million come from?
Mike, you seem to be missing something. Before John Doe, a cashier at McDonalds who gets paid minimum wage because his labor not worth 15 an hour, gets the extra 7.75 an hour, that 7.75 much come from his employer. The franchisee who is trying to make money while dealing with increased labor cost, environmental regulation, etc. So if his labor cost is more than doubled for no reason than a government mandate, and the labor is not worth 15 and hours, he had to, get this, pay it from the money he uses to keep his business going.
So, to keep the business going he will simply do what he can to cut the new inflated labor cost. He will reduce hours, he will let people go, will invest in technology. He may bite the bullet to purchase 3 kiosks to take orders. The machines cost a lot initially, but they also last, they are always there, they don't take family leave, don't get sick, they don't mouth off, etc.
So again Mike, explain, where does the 400 million come from?
The $400 million exists, Mike. It's just in the hands of people who don't spend it. The increased wage turns it into liquid. I know you and many "conservatives" like to justify your ideas through hypotheticals of the mythical small business owner who will lay people off and go out of business if wages must rise. But, that just hasn't happened in the economy. You can point to a business owner who says he will shut down. But anecdotal evidence is exactly that - it's anecdotal. The actual case studies and research proves you wrong. The increased minimum wage does not cost net job loss or hurt they economy. I made $2 and hour working in restuarants and now people make $7-$10. How did that happen? With a rising minimum wage. You can disagree with the studies and the qualified researchers and the data, but you'd be wrong.
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