How do our wages relate to our cost of living?
There is an overwhelming amount of poverty in America compared to the other high-income countries. America should have a higher minimum wage as they rank in the top 10 richest countries but they do not rank in the top 10 for highest minimum wages in high income countries or overall.
This is a direct correlation with the uneven distribution of income in America. When elected, the People First Party, will increase the minimum wage gradually over time. This will increase with connectedness to the cost of living and inflation. Consequently, we are increasing the minimum wage in relation to the rate of inflation so that it’s more realistic for people working on the minimum wage to afford the cost of living.
Raising minimum Wages would boost our economy and reduce poverty
Raising the minimum wage would boost our economy and feed job growth. By increasing the minimum wage from $7.25c an hour to $10.10c an hour, $22 billion would be injected into the economy, resulting in 85,000 new jobs being created over a 3 year period. Household spending would increase by $48 billion the following year and this in turn will lead to job growth as the economy is stimulated. As demonstrated in the graph below, with these increases a family of 3 will no longer have to live below the poverty line.
We believe that increasing the minimum wage will not only help our economy grow, but it will hugely impact poverty in our country. In fact, it’s estimated that a $10.10c rise will bring 900,000 people out of poverty, and in a study done in 2013 by University of Massachusetts at Amherst, economist Arindrajit Dube, PhD provides data showing that there is potential for an estimated 6.8 million people to be helped through this adjustment.
Raising the minimum Wage will reduce government spending
Your current Government currently spends much of your taxes on income support programs like the Supplemental Nutrition Assistance Program (SNAP, or food stamps) because many families are unable to make ends meet due to current low minimum wage. When we raise the minimum wage to $10.10c, approximately 1.7 million Americans will no longer be dependent on these programs, meaning that government spending will be decreased by $7.6 billion. The bottom line here is, less tax for American citizens and a healthier economy.
Shouldn’t Inflation and minimum wages go hand in hand?
Of course it should, but unfortunately the amount of goods and services that can be purchased with the American dollar has notably dropped over the past 50 years. In other words, due to the slow wage increase rate and high inflation, our dollar has lost much of its purchasing power. When elected, we will ensure that the minimum wage is indexed to the inflation rate so that families are able to keep up with the changing costs in their lives.
Minimum Wage should progress with productivity
America is one of the richest and most productive countries in the world yet according to a study by the Center for Economic and Policy Research (CEPR), the minimum wage has not progressed at the same rate. If it had, minimum wage earners should have been earning $21.72c in 2012 instead of $7.25c. By raising the minimum wage to $10.10c, the People First party will gradually be pulling it back in line to where it’s meant to be.
Minimum Wage and equality
The People First Party values equality, and this includes in the workplace. With 1% of the US population earning 22.83% of the country’s income in 2012, our nation’s workplace is becoming anything but equal. By raising the minimum wage, we will close the gap and reduce income inequality.
While on the topic of inequality, lets talk about race, and gender, and how the minimum wage will positively impact disadvantaged groups in our society. Women account for 63% of minimum wage earners in America while African Americans, 17.7% and Hispanic, 21.5%. The concerning aspect of the current situation is that these groups are currently only receiving between 68% and 79% of the National median income, which affirms my point about inequality. Establishing a higher minimum wage will level out the playing field.
Minimum Wage and productivity
We believe that the positive effects of raising the minimum wage are many. As workers are better rewarded for their jobs, they feel happier and become more productive. As a result, people stay at the same job for longer and are less likely to take sick days, meaning that small businesses would benefit from the change.
A humane approach
Furthermore, the current minimum wage of $7.25c per hour would only cover less than half of a living wage of a single adult and isn’t enough to cover basic necessities such as food and medicines, even if they were working 93 hours a week. It is time for a raise as it’s inhumane to ask honest American workers to live like this.
In addition, raising the minimum wage will make us healthier, fitter and allow us to live longer. In fact, a 2014 Human Impact Partners study by Rajiv Bhatia, MD, demonstrated that raising the minimum wage would result in better health and less psychological problems which in turn has a knock on effect for their families.
Similarly, there is a link between teens that live in poverty and poor school attendance and school drop out levels. It follows therefore, that by raising the minimum wage to $10.10c per hour, the People First Party will be giving these teens more opportunities through their education by enabling their parents to provide a stable financial environment.
Finally, where there are raised minimum wages, there is a decreased crime rate as people have secure employment which funds their needs reducing the need to resort to crime.
Raising Minimum Wages – we are committed
In conclusion, the People First Party are committed to making America great and raising minimum wages will help us achieve this through its many facets.