Another year is passing by and still no action have been taken by both the federal government and the state of Florida to increase the hourly minimum wage. This must change.
The promise of an increase in the federal and Florida minimum wage, currently $7.25, and $8.10 per hour respectively, is rapidly fading as the year passes. Increasing the minimum wage paid to Federal and state workers is one of the issues that attracts most debate between elected officials and the public. Despite almost every candidate seeking office in the federal and state legislatures making increasing minimum wage one of their objectives, invariably this promise isn’t kept.
The base criteria for improving the minimum wage is the annual Consumer Price Index (CPI) adjusted to consider inflation for certain goods and services. However, those seeking an increase in the minimum wage argue that the CPI isn’t an accurate indicator, as it doesn’t consider the real circumstance of workers, including family size and cost of rent or mortgage. These proponents prefer an actual living wage taking into consideration factors outside the CPI.
Opposition by businesses
However, the strongest opponent to increasing minimum wage, and reestablishing a more realistic living wage, are businesses required to pay the increase.
Recently, when the City of Miami Beach took the radical decision to increase that city’s minimum wage from the state’s minimum of $8.10, it faced aggressive opposition from a coalition of some of the states more powerful businesses.
Establish a more realistic living wage
Several economists have reached consensus that a more realistic minimum wage, or living wage, should be between $12 to $15 per hour. It has also been proposed that the impact on businesses could be cushioned by phasing the increase over three consecutive years. However, most businesses still oppose this formula for an increase.
Most businesses, and the politicians that represent them, perennially point to research which suggests increasing the minimum wage would necessitate mass layoffs and other detrimental effects.
Economists refute argument of layoffs
On the other hand, some economists regard this argument as a fallacy, that’s overstated. These economists counter argue increasing the minimum wage places more money in the pockets of the lowest earners, therefore increasing consumer spending and boosting the economy.
Collectively, an increase in minimum wage has the potential to benefit the general economy leading to little or no job loss. It has the potential to improve the status of businesses generally, as these businesses could benefit from an increase in their customer base.
Experience of Amazon
The experience of Amazon.com debunks the theory that increasing the minimum wages cost jobs. The rapidly successful and growing company pays thousands of employees well above the federal minimum wage. It is now one of the nation’s top employer, while its profit margin increases. While Amazon is expanding its business, and increasing wages, traditional retailers are struggling to stay open, while paying their employees just above the federal and state minimum wage.
Co-relate increase in minimum wage with tax cuts
With the federal government actively pushing to cut taxes, costing the government revenue, it could also have considered increasing the federal minimum rate. Any reduction in taxes, if approved by Congress, will have detrimental effect on workers earning minimum wage. These workers will not benefit directly from lower income taxes. But, they could see their expenses increase as the federal government contemplates cutting some social services to meet the loss of revenue from reduced taxes. Increasing the federal minimum wage to even $9 per hour would assist minimum wage workers to meet these expected increases.
Moreover, by cutting corporate taxes the government offers businesses the ability to increase earnings. This should, therefore, be an opportunity for the federal government to increase the minimum wage to be met from these extra earnings.
Admittedly, increasing the minimum wage will increase a company’s expenses, but it has the potential to increase a company’s revenue. With workers having more money to spend generally they will purchase more. Companies can increase their advertising, promotions, and sales w2ith consumers having higher incomes. This is not a theory, but a fact.
The government plans to cut taxes to afford citizens more money to spend on consumer goods and drive the economy. Increasing minimum wage has the potential to accomplish the same thing.
The argument that increasing minimum wages will cost jobs isn’t totally valid. More elected officials at the federal and state levels need to counter this argument, and act more aggressively to have minimum wages increased to a realistic living wage.