Letter: Minimum wage increase would have many benefits

Talk about it

An increase in the minimum wage is long overdue and should be raised to President Obama’s proposed $9 an hour.

An American working 40 hours a week for 52 weeks a year at the current federal minimum wage of $7.25 would only make $15,080 before taxes (40 hours x 52 weeks x $7.25 = $15,080). With a poverty line at $15,510 for two people, Americans who work 40 hours every single week cannot support themselves and a child.

In 2009, the federal minimum wage increase to $7.25 was the equivalent of $5.30 in 1996 dollars. Right now, the same $7.25 is equivalent to $4.97 in ’96 dollars.

The real problem boils down to inaccurate misconceptions. Some will argue unemployment will rise with an increased federal minimum wage; however, past increases and many studies do not tie these two together.

“Mostly what we find … is that the net employment effect of an increase in the minimum wage is zero,” Dr. Reynold F. Nesiba, an associate professor of economics at Augustana College, said.

Building a strong middle class is crucial to the economic success of the United States. Money going to families living on a minimum wage would have an immediate positive impact on the economy. The extra $3,640 a year is enough to pay for an extra 910 gallons of gas, four average house payments or more than half of a year’s worth of groceries for a family of four.

Raising the minimum wage will increase demand in the market immediately. This would, in effect, lower prices for everyone else in addition to taking strain off of government-aid programs such as SNAP (formally the Food Stamp Program), housing assistance and other forms of welfare assistance — not to mention extra income tax to a struggling federal government.

Politicians conjure up charts and diagrams showing the alleged nasty effects of a minimum wage increase on the economy, but scholars like Dr. Nesiba point out the charts’ errors.

“The simple supply and demand model that gets used to show a minimum wage causes unemployment is a deeply-flawed, ideologically-biased and intentionally-misleading way of thinking about the minimum wage,” Dr. Nesiba said.

Feeding the wealthiest few more money and expecting it to slip into the hands of the middle class does not and will not work.

The middle class has fallen far behind the top few percentiles in the United States. Right now in the United States, the top 1 percent has 40 percent of the nation’s wealth. On the other hand, the bottom 80 percent of Americans only holds 7 percent of the nation’s wealth.

I think it’s safe to say the average person would be pretty hard-pressed to defend the “success” of the current system such immense inequality.

It’s time to rebuild the middle class in America. Giving hard-working Americans an income that is enough to make ends meet is the furthest thing from socialism. It’s doing the right thing, in addition to helping the economy.

Tags: opinion, letters, business