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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region Forums$10.10 Minimum Wage Would Save The U.S. Government $7.6 Billion A Year
$10.10 Minimum Wage Would Save The U.S. Government $7.6 Billion A Yearby Kevin Short at the Huffington Post
http://www.huffingtonpost.com/2014/10/16/minimum-wage-public-assis_n_5992458.html
"SNIP......................
Raising the federal minimum wage would save the government billions and have sweeping benefits for low-income families, according to a new analysis by the Economic Policy Institute, a think tank focused on labor issues.
EPI's report found that if the minimum wage were boosted from its current level of $7.25 per hour to $10.10, as proposed by the Fair Minimum Wage Act of 2014, more than 1.7 million Americans would no longer have to rely on public assistance programs. This would produce $7.6 billion per year or more in savings for the federal government, according to the study.
Millions of Americans, known as the "working poor," are unable to lift themselves above the poverty line despite working full-time, minimum-wage jobs. Increasing the minimum wage to $10.10 would mean that many of these people wouldn't have to rely on additional public subsidies to make ends meet.
Currently, half of all people earning under $10.10 per hour, roughly 11.9 million Americans, receive some form of means-tested benefits from the government, like the Earned Income Tax Credit, food stamps and others.
.........................SNIP"
rafeh1
(385 posts)Well if you ever been to Germany or look at their wage structure the avg german wage is 50% higher than US. In addition they have full healthcare along with a month of vacation every year. Yet Germany is the worlds number 2 exporter. In economic terms when the poor get money they spend it. when the rich get money they keep it. So minimum wage workers getting money creates huge positive bump in the economy.
If you guys get a chance read Henry fords history. He started offering his factory workers $5 per day while the average wage was around 3. The rich in Detroit were very upset because everybody was leaving their jobs to go work for ford. When Henry ford was asked why he was paying his workers $5 he gave a very astute answer "So they can afford to buy ford cars"
Henry Ford himself later called the $5 Day the greatest cost-cutting move I ever made.
http://archive.freep.com/article/20140105/BUSINESS06/301050040/Henry-Ford-5-day
doesn't have a minimum wage.
rafeh1
(385 posts)compare avg wage in germany vs avg wage in here
redruddyred
(1,615 posts)tclambert
(11,080 posts)And the money workers spend gets spent over and over, so there's a multiplying effect. Moody's did a study on this (https://www.economy.com/dismal/article_free.asp?cid=102598) and found $1 in Bush's tax cuts for the rich resulted in about $0.29 economic stimulus (in other words, a loss of 71 cents), whereas road-building programs gave $1.59 stimulus for every dollar spent, and Food Stamps came out on top with $1.73 stimulus for every dollar spent.
And it's exactly because of what you said: "When the poor get money they spend it. When the rich get money they keep it." Working people, especially the working poor, spend it, and spend it quickly. Studies have shown that, contrary to popular Republican belief, increasing the minimum wage actually increases jobs. It's because you have customers with more money to spend, and those are the real job creators. Nobody ever increases the company's staffing levels because the CEO got a tax break. But if working people in the neighborhood get raises, that neighborhood becomes an instant prosperity zone.
coos bay tom
(3 posts)The best thing that could happen for low wage workers is a raise to $10.10. Less people on foodstamps and more money into the economy. It's a good thing
bigwillq
(72,790 posts)Welcome to DU!
dotymed
(5,610 posts)But it seems that the (very much needed) raise would be offset by a loss of assistance, food stamps, Medicaid, etc..
If that is the case, in order for these people to actually have more expendable income, a minimum wage of at least $15 an hour would be needed.
Wounded Bear
(58,440 posts)to the "failing" Social Security system, too.
coos bay tom
(3 posts)You are right on both accounts . I wonder why there is so much opposition to giving low wage workers a fair shake The boost in the overall economy alone would make up for this increase
Kber
(5,043 posts)To answer your question about opposition, I think it stems from a desire to have an overly dependent workforce that is used to being abused.
It's bad for America, and,in aggregate, bad for business. Unfortunately, many wealthy business owners (and political money men) cannot see beyond their personal short term (as in quarter end) interest.
Wounded Bear
(58,440 posts)have no skin in the game. It wouldn't directly benefit them, so they don't see the logic behind it.
For them, anybody who makes less than $250k or so isn't really "a part of" the economy anyway.
Thinkingabout
(30,058 posts)to "control" people in the lower incomes and then they need something to complain about the "lazy" people on public assistance.
genxlib
(5,506 posts)They (generally speaking) would be happy to do neither. Even with a low minimum wage they want to eliminate public assistance.
They will still complain about the lazy people because facts don't matter. In fact, they would point to the resulting spike in poverty to say people were getting even lazier.
bigwillq
(72,790 posts)Generic Other
(28,979 posts)You can't have it both ways. If this is all we need to do to cut public subsidies and spend less money for foodstamps and welfare, then GOP needs to put up or shut up. But we all know they don't care. They just want to be assholes.
malthaussen
(17,066 posts)... then it follows it would cost the ruling class 7.6 billion, and this they will not allow.
-- Mal
herding cats
(19,549 posts)First I'll disclose I've not read the study in question yet, but some things are just common sense and I'll address those areas.
A portion of the savings is going to be administrative costs and increased tax revenue (medicare and SS) by the wage increase. Also, there would be an economic boost as those earning more are able to consume more. Which in turn raises sales and other consumption type tax revenues and increases profits for the goods and services providers. The reality is it's simply bad economics all around to insist on keeping the minimum wage so low.
Man from Pickens
(1,713 posts)if the minimum wage goes up 25%, within a couple of years they will jack up the cost of living by 50%
The problem is not the wages. The problem is the Wall Streeters and their DC accomplices sucking all the value out of the economy.
Response to Man from Pickens (Reply #14)
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Tikki
(14,538 posts)and push new ideas and products.
Tikki
Tikki
(14,538 posts)be a letter code that tells customers that the business owner pays at least $10.00 an hour to it's
employees.
Those would be the places I would shop.
I know, I know...greedy repugs and radians would not shop there on principle...
Tikki
Dont call me Shirley
(10,998 posts)KentuckyWoman
(6,666 posts)Not in Manhattan or Napa of course.
2 parents making 10 bucks an hour with a consistent 40+ hrs each can squeeze by with difficulty in many places in the US.
Dont call me Shirley
(10,998 posts)that there are no mini-disasters. If neither have any benefits at work, life really begins to get tough. At $20 an hour the kids qualify for SCHIP. And parents can get an Earned Income Tax Credit on federal taxes. If only 1 parent is working at $10 an hour the other not working then finances and living become dismal.
KentuckyWoman
(6,666 posts)It's damn hard but can be done with luck, a bit of support system and extreme frugality. I consider around $10 min wage to be the first stepping stone - shifts the "burden" of worker support back to the people who gain the wealth created by the worker at least some.
abelenkpe
(9,933 posts)Should be 20. As always aiming low and if we win 8 we'll claim victory.