Time for another minimum wage hike
During the past 30 years low-income Americans received no raises. At the same time, worker productivity, primarily because of automation, has increased enormously, and thus the profits of corporations have been very healthy, allowing the top managers to receive salaries and bonuses in the millions. While wages were stagnant, low-income families were able to maintain their standard of living by borrowing.
Since the top social classes had plenty of money they lent it to the bottom of the economic ladder and profited from the interest on the loans.
This situation is most unhealthy. There are data showing that the health, happiness and longevity of those with lower incomes are much lower than the health, happiness and longevity of those with higher incomes. For example, the lower income live on average to 74 and the higher income to 84. All kinds of social pathology — teenage pregnancies, divorces, violence, suicides, family disorganization and depression rates — are greater among those with lower incomes.
This picture was very different in the 1940s. The minimum wage rate was highest at that time and has lost much of its value. President Obama wants to increase it to $9 per hour, but the Republicans will not agree, arguing that this will increase the unemployment rate.
Yet there are studies by economists that show that increases in the minimum wage do not affect the unemployment rate. While some teenagers may lose their jobs, people who have more money spend it, and that increases employment. All this is described with references to the literature on economics by Richard Wolff in "Capitalism Hits the Fan."
HARRY C. TRIANDIS