Wednesday, April 27, 2016

Minimum Wage Benefits

The conservative mantra that raising the minimum wage is bad for business is being disproved.

According to a new report by Cornell University’s School of Hotel Administration, neither restaurants themselves nor their employees have suffered significant losses as a result of past wage hikes.

“There is no doubt that restaurateurs face higher expenses as a result of minimum wage increases, but if restaurants are raising prices to compensate, those increases do not appear to decrease demand or profitability enough to sizably or reliably decrease either the number of restaurants or the number of employees,” Michael Lynn, a co-author and professor of consumer behavior and marketing, said in a press release.

For the study, the researchers looked at wage increases in states between 1995 and 2014 to asses the impact on restaurants, finding that hikes have had “no reliable linear effect on the number of full-service restaurants or on full-service restaurant employment, even when looking at cumulative effects over three years.”

Not only that, raising the minimum wage could have an impact on crime.

Mass incarceration is failing to prevent crime, according to the Obama administration — so much so that the president’s staff is looking in a few unconventional places for new ideas on public safety.

For example, raising the federal minimum wage to $12 an hour could prevent as many as half a million crimes annually, according to a new report from the White House’s Council of Economic Advisers, a group of economists and researchers charged with providing the president with analysis and advice on economic questions.

[…]

The authors consider a few ways of reducing crime. They forecast that hiking the federal minimum hourly wage from $7.25 to $12 would reduce crime by 3 percent to 5 percent, as fewer people would be forced to turn to illegal activity to make ends meet. By contrast, spending an additional $10 billion on incarceration — a massive increase — would reduce crime by only 1 percent to 4 percent, according to the report.

It goes beyond economics: paying people a living wage is the right thing to do.

One bark on “Minimum Wage Benefits

  1. If raising the minimum wage is such a bad thing, why is it a good thing when CEO’s get raises? I’m sure they could outsource the CEO position to someone for less money…possibly saving the company millions in the process.

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