In response to President Obama’s proposal to increase the federal minimum wage to $10.10 per hour, the United States Senate has begun to discuss the issue.
Although it is possible that the Democrat-controlled Senate will take action on the matter after Easter break, it is unlikely that the House of Representatives, controlled by Republicans, will consider it any time soon.
Nevertheless, it is an issue that never completely fades away. Several states have acted this year to increase the minimum wage, and the issue is gaining attention from the electorate.
GCP Government Affairs Council begins discussion
The Greater Cleveland Partnership’s Government Affairs Council recently began a discussion about the minimum wage and learned that the business community has both supporters and opponents. Businesses supporting an increase cite the need to lift people out of poverty, thereby increasing their ability to spend more on goods and services and pay more in taxes, thus improving the overall economy.
Some economists state that minimum wage increases have historically not led to job losses, although that fact is disputed by others in the business community and economists. In response to the President’s proposal, the Congressional Budget Office reported that up to 500,000 jobs would be lost nationally. But they also estimate that 1 million people would be brought above the poverty level. Small businesses in particular may find it necessary to restrict hiring or even lay workers off if the rate goes to $10.10.
Enacted in 1940, the first federal minimum wage was set at 25 cents per hour, or $3.25 in 2012 dollars. It has steadily increased over the years, but the purchasing power generated by the current federal minimum wage is about the same as it was in the mid-1960s.
Alternatives to the minimum wage—such as an increase in the Earned Income Tax Credit—are offered as a good solution. Nevertheless, the debate goes on.
Tell us what you think
GCP members are encouraged to let us know how they feel about this issue. By taking 10 minutes to participate in this survey, members can provide important insight, which will be relayed to the Government Affairs Council. Results will also be reported in a future edition of Every Monday.
Click here to take the survey.
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