Everyone Wins When Minimum Wage is Increased
The City of Kansas City, like many other cities, is joining the movement to increase the Federal minimum wage from $7.25/hour to $15.00/hour. All across the country, including Kansas City, low wage workers are walking off the job to demand more hourly wages. The campaign has been successful—big companies like McDonalds, Walmart, Target, Starbucks, Costco and Whole Foods have all pledged to increase their workers’ wages beyond the minimum wage floor. In fact, Whole Foods, which has a starting salary of $10.00/hour, reports an average hourly rate of $18.89/hour. Who will be impacted the most by this raise nation-wide? A recent study by the National Employment Lawyers Project found that 42 percent of all workers make less than $15.00/hour. Of that percentage, African Americans, Latinos and women are disproportionately represented. Many of those workers are supporting families with their wages, so the increase from $15,080 annually (well below the poverty level for a family of four) to $31,000 annually will give them a fighting chance to succeed. Although, when you’re feeding a family, $31,000 a year does not go very far. But not just wage earners win when wages are increased. In fact, businesses themselves benefit from higher wages because there is less turnover among workers and workers are more motivated to do their jobs well, which increases overall productivity. Also, low turnover means businesses do not have to spend money and time training new employees. Whole Foods, which boasts an average hourly rate of almost $19.00/hour, has reported employee turnover of less than 10 percent, which they attribute to their high rate of pay. Finally, many economists believe that a minimum wage increase could actually benefit the economy as a whole because low wage workers will have more money to spend, which will trigger demand and job growth. In short, there is virtually no downside to increasing the minimum wage for workers. Everyone wins.