The minimum wage in the U.S. (and in Kentucky) hasn’t been raised since 2009. It’s time to change that.
Businesses claim that a rise in the minimum wage will destroy businesses and the economy; there is no evidence of this. In fact, in communities that raise the minimum wage, there is no discernible negative effect on jobs or the local economy when compared with similar communities that did not raise their minimum wage.
Some economists say that raising the minimum wage will artificially raise the costs of goods. But in reality, we are artificially depressing the cost of goods. That is because, under our current system, taxpayers are supplementing the wages of low-wage workers, providing corporate welfare to employers paying minimum wage.
These employers keep costs down by paying low wages, then make us, the taxpayers, fill in the gaps for their underpaid employees who work full time but still live below the poverty line. Taxpayers end up footing the bill for these companies by providing their employees Medicaid, food stamps, housing, the Earned Income Tax Credit, TANF, and much more. Then these companies have the audacity to also demand lower corporate taxes, even though that would decimate the safety net on which their employees rely.
We have allowed these businesses to exempt themselves from being partners in the social contract, instead taking all the rewards (low costs and high profits) and expecting us to foot the bill. Instead of these free-loading companies, we need businesses that want to be partners with the public and nonprofit sectors. Such businesses are essential to a vibrant community and a strong economy, by paying a livable wage.
Meanwhile, the pay of CEOs is up nearly 1000 percent since 1978 — a figure that is double the stock market growth over the same period. In other words, almost all of the new wealth created in the last 25 years or so has gone straight to the top one percent, leaving most workers behind. It’s time to share that wealth with the persons actually producing it.
Working individuals and families should not be forced to make choices between food and paying their electric bills, and taxpayers should not be forced to subsidize the wages of employees simply so a business owner can take the profits for their executives or stock buybacks.
The fact is, putting more money into the pockets of workers increases the money multiplier effect in the local economy. This, in turn, raises demand for certain products. That is the kind of economy we need in Kentucky.
But, if you are one of those businesses that wants to make your profits off low-wage employees while shifting the burden to the taxpayer, you will say that raising the minimum wage will drive you out of business.
And to that we say: good riddance.
Written by Tracy Bentley of Midway, Kentucky