Equal Pay Day: Raising minimum wage will help women – and the economy
Women – and their families – are disproportionately affected by the low US minimum wage. Equal Pay Day serves as a stark reminder of that reality. Raising the minimum wage would boost the economy, and it would help close the gender wage gap.
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New legislation introduced last month in Congress – the Fair Minimum Wage Act of 2013 – would over the course of three years, gradually increase the minimum wage to $10.10 and increase the minimum cash wage for tipped workers to 70 percent of the regular minimum wage, indexing both to inflation. The bill would increase the gross earnings of a full-time minimum wage employee by $5,700 a year, lifting a family of three above the poverty line.Skip to next paragraph
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Critics argue that a wage increase would hurt employment and increase poverty. And a few studies have shown small negative effects on employment. But the bulk of the evidence suggests otherwise. In a study published in November 2010, for example, three economists studied 16 years of data, and compared counties where the minimum wage increased to neighboring counties where it didn’t. They found no detrimental impact on employment.
Other economists have gone further, concluding that a wage increase would stimulate the economy. The thinking is that low-income employees tend to immediately spend the additional money they earn on groceries, housing, transportation, and other expenses. Corporate profits would increase, and businesses would expand.
Take San Jose,Calif. In the spring of 2011, a group of college students and their professor at San Jose State organized a grass-roots campaign to raise the city's minimum wage from $8 to $10. Critics echoed the familiar chorus that the measure would kill jobs and force residents to relocate. The students persisted, and with the support of labor, nonprofit, and community groups, the measure passed.
The wage increase took effect earlier this month, and while still early, initial feedback has been encouraging. Though Scott Knies, executive director of San Jose’s Downtown Association, has said that some businesses have raised prices or cut employee hours, others expect much of the extra $70 million now in workers’ pockets to be spent locally, boosting business.
One business owner is even considering raising wages in other cities because he believes fair compensation improves his bottom line. He’s in good company. Researchers have found that higher wages increase worker productivity and reduce employee turnover.
Congress has raised the minimum wage only three times in the past 30 years. For millions of women, especially, time is running out. In a country that prides itself on social mobility and equal opportunity for all, isn’t it time to give all workers a livable wage?