Minimum wage Increase
Did increasing the minimum
a large number of layoffs?
when President Clinton was pushing for an increase in the minimum wage.
Most of the Republicans fought against the increase, they claimed it would
cause layoffs, increase inflation and lower profits of small businesses.
The biggest problem seemed to be it might help low paid wage earners, of
course you could never get a Republican to admit that. You need to realize
most Republicans feel if someone is working for minimum wage they must
be a high school student or someone too stupid to get, "a real job." In
general Republicans seem to think if you are not rich it's your fault,
you must have done something wrong. The reality is most people, myself
included, work their butts off to just stay afloat.
it is years later and the layoffs did not occur. How could that be? The
thing is, there was no basis for the Republicans claims. Here is the reality,
a small company that has 10 employees might net the owner $100,000.00 a
year. If minimum wage goes up $1.50 per hour all at once and the business
owner does nothing different, it will cost the business owner about an
extra $32,000.00 a year. If the owner did nothing different he would still
net $68,000.00 a year, which is about double what most people make. Lets
say the owner decides to lay off 2 people, 20% of his work force, which
is basically what the Republicans claimed would happen. The layoff will
only save the business owner about $24,000.00 a year. Then the owner will
have a problem, how will he get 8 people to do the same work as 10? "Think
about it for a minute!!....................You see what actually happened
was the money from the higher wages got into the hands of the low paid
workers and that is what stimulated the economy. (The
Republicans always claim tax cuts stimulate the economy.) The low paid
workers spent the extra money they earned, that money stayed in circulation
stimulating sales across the board. Going back to my make believe company,
the owner found his business increasing and his profits increasing also.
The fact is, most small businesses started earning enough extra income
to hire more workers, pay them more and still make the same profits or
more than they did before the minimum wage was increased.
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