I would never have thought about writing this letter had I not recently read one of a very different nature. In that one, Mr. Mazzuca summarily dismissed President Obama’s suggestion that we raise the minimum wage from its current level of $7.25 per hour. I believe that he termed it a political ploy and I would like to suggest that it is no such thing! I’d rather think of it as an economic necessity.
I do believe that we all understand that our economy only thrives when we consumers create an increase in the “demand” for goods and services; and furthermore that an increase in “demand” creates jobs. I also believe that most of us are aware that only 10 percent of those of us who are currently employed receive 50 percent of all the compensation.
Unfortunately, this latter inequality does not create a maximum amount of “demand” because those wealthiest 10 percent don’t — or can’t — spend all of their earnings. And so, they invest substantial amounts of their money in the stock market. (Incidentally, that helps to explain why “the market” is at an all time high.) However, except for financing start-ups, most investments in the stock market do very little to increase either the demand for goods and services or the creation of jobs. And so, despite the new highs of the market, our economy continues to struggle.
OK, then, why do I believe that raising the minimum wage (substantially) will help? Because although some few workers will be temporarily laid off, raising the lowest wages will also result in increasing the paychecks of those earning somewhat more than the minimum, the demand for goods and services will also then be greater, and new jobs will be created. And finally, as sales increase, those who were unemployed will be re-hired and our various businesses will show greater profits. That’s just the way our free enterprise system is supposed to work!
I do believe that raising the “minimum wage” is “a winner”!
David Le Vine