National Consumers League

Why raising the minimum wage is a good policy, even in times of economic downturn


By Benjamin Judge, NCL Public Policy Intern Benjamin Judge, a public policy intern at NCL this summer, is a rising sophomore at the University of North Carolina- Asheville, where he is majoring in Political Science and minoring in Economics. At UNCA, Benjamin is a Student Senator and Academic Affairs Chair in Student Government, a Student Ambassador, and a member of the Sigma Nu Fraternity. From California to Maine, legislation is being introduced to increase the minimum wage at that state level, while the federal minimum wage remains stagnant. New research shows that an increase in the federal minimum wage would not only improve the livelihood of the average worker, but would also stimulate the economy, increase productivity in an economic downturn, and draw massive public support. The benefits The federal minimum wage is currently $7.25 and, according to the Huffington Post, an increase of one dollar (to $8.25) would improve the lives of 10 million workers and “could ultimately pump as much as $9 billion into the economy.” This would greatly improve the economic situation of our country while also helping the workers who provide us with the goods and services we enjoy. It is very hard to make an argument against a measure that does so much good. Why hasn’t it already been raised? Many businesses are hesitant to raise wages during an economic downturn because they want to preserve their profits, however there is a productivity phenomenon that the Center for American Progress acknowledges. Whenever there is an economic downturn, the average worker becomes more productive to preserve their job, and this increase in productivity should be rewarded with a payment increase. Sadly, this increase in productivity goes unrewarded in most instances. Public Support The last major benefit to increasing the federal minimum wage, is that the general public is largely in support of raising the minimum wage. The Huffington Post article quotes Celinda Lake, president of polling firm Lake Research Partners, who says, "When we've done public polls anywhere from 86 to 67 percent say they will support an increase in the minimum wage."  With all of the before mentioned benefits, combined with a new study that shows that an increase in the minimum wage does not decrease employment, the need to increase the federal minimum wage remains clear.