A study released by the Economic Policy Institute in mid-October shows that increasing the minimum wage from its current level of $7.25 an hour to $10.10 an hour would save the federal government more than $7.6 billion dollars per year.
It stands to reason that anyone who works full-time should not have to live in poverty. And yet, a full-time minimum wage worker who has only one child falls below the federal poverty line. Contrary to conservative myths, 88 percent of workers who are paid minimum wage are adults, over the age of twenty. On average, these workers bring home 50 percent of their family’s income.
Out of all workers who are forced to rely on government benefits to help make ends meet, more than 50 percent earn less than 10.10 per hour. This graph from EPI illustrates how raising the wage to $10.10 could reduce the number of working people who rely on programs like SNAP, WIC and cash assistance.
By passing the Minimum Wage Act of 2014, which would raise the minimum wage to $10.10 over a three-year period, Congress would be making sure that over 27 million American workers who deserve a raise would finally get one. The raise in wage would give a much needed boost to more than 20 percent of American wage earners. It would also make it possible for at least 1.7 million working Americans to no longer have to rely on government assistance to survive.
EPI’s research, which was conducted by Economic Analyst David Cooper, conservatively estimates that raising the minimum wage from $7.25 to $10.10 an hour would save taxpayers a whopping $7.6 billion dollars a year — money which currently goes to fund programs that benefit the working poor, like food stamps, Medicaid, housing assistance and WIC. Not only would the raise save the safety net billions of dollars, it would help ensure that businesses (many of which are earning record profits) are doing their fair share.
The Fair Minimum Wage Act of 2014, which has been stalled by Republicans in Congress, would not only give these workers a raise today, but it will protect them from falling below the poverty line in the future by tying the minimum wage to the rate of inflation.
The bill, HR1010, would also give tipped workers their first wage increase in over two decades. Currently, the minimum wage for tipped workers is just $2.13 an hour. The bill would gradually raise the wages of these workers to 70 percent of the minimum wage.
We’ve seen that trickle-down/top-down economics doesn’t work. Under that system, the rich get richer and the poor get poorer. The biggest advocates of trickle down economics are the same people who so vehemently oppose even the mere thought of seeing one precious cent from their accumulated piles of cash trickle out of their hands. It’s a con game. The almighty job creators don’t actually fuel the American economy; the every day American worker does, but only if she has enough money to buy the things she needs and wants.
In August, University of Wisconsin Professor Menzie Chin released another important economic study. His work clearly showed that the GOP’s pro-business, anti-worker policies actually hurt business and stunt economic growth. Menzie found a negative correlation between Republican economic policies and job growth, as well, busting the myth that asking employers to pay a fair wage will cause them to close down and take away jobs. The main thing that actually causes a company to go out of business is lack of customers to buy their services or goods.
The Fair Minimum Wage Act of 2014 would equate to an additional $32 billion dollars being put into the hands of American workers, who can then spend those dollars paying bills or buying groceries or putting gas in their cars, maybe get a haircut or a new pair of shoes, who knows?
When 20 percent of the country’s workforce has to rely on government assistance to get by, there’s a problem. Taxpayers are the ones who have been paying for the GOP Congress’ unwillingness to solve that problem. As much as the right wing complains about the poor “freeloading off taxpayers,” they’re completely content to allow 1.7 million people to continue to rely on taxpayer funded programs when they could easily help Democrats pass HR 1010 instead — a move that would easily save the government at least $7.6 billion dollars.
That’s the definition of fiscal irresponsibility