Sunday, December 28, 2014

Living wages for employees should be a part of every business plan.

Raising the minimum wage will make life better for the folks on minimum wage. That is a good thing. And it affects a different group of folks than what is imagined by many. See the chart below.

But that ain't all.

Raising the minimum wage will also put more money into circulation in the economy. Folks making minimum wage WILL spend their increased wages. They have to.

I realize that this will make some difficulties for businesses. It will also make more business for those or other businesses. When we raised the minimum wage in '96 the right predicted job losses. Instead we had years of job growth.

And the gigantic corporations can raise prices a tiny bit if their uber-plutocrat owners are afraid of losing some minute fraction of their wealth as a result.

To me it is a principle:
"Living wages for employees should be a part of every business plan."
If a start-up, or any other business, cannot afford to pay its employees a living wage, it should rework its plan; reduce executive salaries, dividends or profits; or scale down the business to a size that is workable. Yes, some will lose jobs as a result. But many will also gain jobs as spending increases.

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