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applegrove

(118,019 posts)
Tue Oct 21, 2014, 10:53 PM Oct 2014

$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 Year

by 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.



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$10.10 Minimum Wage Would Save The U.S. Government $7.6 Billion A Year (Original Post) applegrove Oct 2014 OP
Henry Ford himself later called the $5/ Day wage “the greatest cost-cutting move I ever made.” rafeh1 Oct 2014 #1
Germany lancer78 Oct 2014 #2
i said avg wage not minimum wage rafeh1 Oct 2014 #3
they also don't have crappy, shameful corporations like walmart and monsanto. redruddyred Oct 2014 #19
Excellent comment. Ford realized better-paid workers made better customers. tclambert Oct 2014 #15
Raise minimum wage. coos bay tom Oct 2014 #4
Hello bigwillq Oct 2014 #5
It sounds good for government savings. dotymed Oct 2014 #20
Would be a good shot in the arm... Wounded Bear Oct 2014 #6
shot in the arm coos bay tom Oct 2014 #8
First - welcome to DU! I hope you like it here. Kber Oct 2014 #13
Unfortunately, the people with the actual power... Wounded Bear Oct 2014 #16
The GOP apparently wants to continue to spend the money on public assistance and keep the wages low Thinkingabout Oct 2014 #7
You are too kind genxlib Oct 2014 #17
K and R bigwillq Oct 2014 #9
This argument cuts the legs off the whining bellyaching rightwing! Generic Other Oct 2014 #10
Well, if it would save the government 7.6 billion... malthaussen Oct 2014 #11
That's the argument by many wealthy, but that's not how it works in reality. herding cats Oct 2014 #12
Who you kidding Man from Pickens Oct 2014 #14
Message auto-removed Name removed Oct 2014 #18
The prices have been going up anyway. The masses can spend into competition if given a chance. Tikki Oct 2014 #22
You know how they have the grading letters in the front window of a restaurant or whatever...There needs to Tikki Oct 2014 #21
$10.10 is not enough to live on, you still need food stamps, Medicaid, etc. Dont call me Shirley Oct 2014 #23
It's possible to live on 10 bucks an hour. KentuckyWoman Oct 2014 #24
$20 an hour for a family of 3 or 4, is just barely squeezing by, paycheck to paycheck. Pray, pray Dont call me Shirley Oct 2014 #25
Totally agreed. KentuckyWoman Oct 2014 #27
We're advocating for 10 dollars? abelenkpe Oct 2014 #26

rafeh1

(385 posts)
1. Henry Ford himself later called the $5/ Day wage “the greatest cost-cutting move I ever made.”
Wed Oct 22, 2014, 01:28 AM
Oct 2014

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

tclambert

(11,080 posts)
15. Excellent comment. Ford realized better-paid workers made better customers.
Wed Oct 22, 2014, 03:41 PM
Oct 2014

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)
4. Raise minimum wage.
Wed Oct 22, 2014, 03:09 AM
Oct 2014

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

dotymed

(5,610 posts)
20. It sounds good for government savings.
Thu Oct 23, 2014, 09:25 AM
Oct 2014

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.

coos bay tom

(3 posts)
8. shot in the arm
Wed Oct 22, 2014, 11:37 AM
Oct 2014

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)
13. First - welcome to DU! I hope you like it here.
Wed Oct 22, 2014, 02:13 PM
Oct 2014

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)
16. Unfortunately, the people with the actual power...
Wed Oct 22, 2014, 07:36 PM
Oct 2014

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)
7. The GOP apparently wants to continue to spend the money on public assistance and keep the wages low
Wed Oct 22, 2014, 09:10 AM
Oct 2014

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)
17. You are too kind
Wed Oct 22, 2014, 10:33 PM
Oct 2014

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.

Generic Other

(28,979 posts)
10. This argument cuts the legs off the whining bellyaching rightwing!
Wed Oct 22, 2014, 11:43 AM
Oct 2014

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)
11. Well, if it would save the government 7.6 billion...
Wed Oct 22, 2014, 01:03 PM
Oct 2014

... then it follows it would cost the ruling class 7.6 billion, and this they will not allow.

-- Mal

herding cats

(19,549 posts)
12. That's the argument by many wealthy, but that's not how it works in reality.
Wed Oct 22, 2014, 01:29 PM
Oct 2014

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)
14. Who you kidding
Wed Oct 22, 2014, 02:31 PM
Oct 2014

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)

Tikki

(14,538 posts)
22. The prices have been going up anyway. The masses can spend into competition if given a chance.
Thu Oct 23, 2014, 12:55 PM
Oct 2014

and push new ideas and products.

Tikki

Tikki

(14,538 posts)
21. You know how they have the grading letters in the front window of a restaurant or whatever...There needs to
Thu Oct 23, 2014, 12:52 PM
Oct 2014

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

KentuckyWoman

(6,666 posts)
24. It's possible to live on 10 bucks an hour.
Fri Oct 24, 2014, 07:44 AM
Oct 2014

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)
25. $20 an hour for a family of 3 or 4, is just barely squeezing by, paycheck to paycheck. Pray, pray
Fri Oct 24, 2014, 09:22 AM
Oct 2014

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)
27. Totally agreed.
Fri Oct 24, 2014, 12:22 PM
Oct 2014

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)
26. We're advocating for 10 dollars?
Fri Oct 24, 2014, 11:01 AM
Oct 2014

Should be 20. As always aiming low and if we win 8 we'll claim victory.

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