Minimum wage Increase
Did increasing the minimum wage cause
a large number of layoffs?
    Remember 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.
     Here 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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