It seems that Obama's $10.10 minimum wage for contractors might be the right amount the economists agree on raising it to.
So where to set the wage floor? Whether he arrived there by logic,
intuition, or dumb luck, there’s a defensible case that the sweet spot
is in the neighborhood of Obama’s suggested $10.10 an hour. The
Initiative on Global Markets at the University of Chicago Booth School
of Business found in a survey last year of leading economists that 47
percent felt the good effects of a $9 minimum wage—the figure on the
table at the time—would outweigh any bad ones. Only 11 percent
disagreed. Last month seven Nobel prize-winning economists and four
former presidents of the American Economic Association, along with more
than 600 other economists, signed a letter to Congress urging passage of
the $10.10 floor. “At a time when persistent high unemployment is
putting enormous downward pressure on wages,” the letter said, “such a
minimum-wage increase would provide a much-needed boost to the earnings
of low-wage workers.”
I feel that giving millions of people a $3 extra per hour raise will help GDP growth. That equates to $120 a week extra in peoples pay packets and that means a car payment, more restaurant meals, or simply more money in the bank.
The gains come out of Wal-mart and McDonalds bottom lines but I'm sure people at those companies can cut costs or raise prices to offset this amount. I mean if Wal-mart hikes prices to offset wage increases I'm sure Amazon will be happy to pick up the market share that is left behind. I mean with $120 extra a month more people can afford Amazon Prime.
Some retailers will be hurt by wage hikes but more people with more money in their pockets is normally a good thing. It will reduce the need for government hand-outs and might just empower more people to contribute to economic growth. I always think people are better able to figure out what to do with their cash than the government or any corporation usually does.
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