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Effects of raising the minimum wage: An extra dime a day for food. A raise for 29 million people.

Daily Kos, October 24, 2012

 By Laura Clawson

Democrats, led by California's Rep. George Miller and Iowa's Sen. Tom Harkin, have proposed the first law raising the minimum wage since Democrats took the House and Senate in 2007. The proposed bill would raise the minimum wage to $9.80 over three years, then link it to inflation so that minimum-wage workers wouldn't have to wait for Democrats to hold big majorities in Congress to get a raise. The minimum wage for tipped workers, which has been stuck at $2.13 since 1991, would go up by 85 cents at a time until it was 70 percent of the regular minimum.

One of the big objections Republican politicians and low-wage employers always raise to increasing the minimum wage is that it will increase costs for the very people it's supposed to help. But a new study from the Food Labor Research Center at the University of California, Berkeley, the Food Chain Workers Alliance, and Restaurant Opportunities Centers United shows that the added food costs would be very low.

The new study includes increased labor costs at every step of the food chain—not just grocery stores and restaurants but poultry processors and warehouses—and assumes that the entire cost of a higher minimum wage would be passed directly to consumers. It also takes into account a possible ripple effect as workers currently making just above the minimum wage get raises to stay just above the new minimum. With all that care to be generous to the people who want to keep the minimum wage low, what's the result?

  • "The average U.S. household spends $3,827 a year on food at home and $2,634 on food away from home. ... [T]his means that on average over the next three years, the average households would pay less than 3 cents more a day on grocery retail, and, combining both food at home and away from home, less than 10 cents a day."
  • At the end of three years, with the minimum wage having gone from $7.25 an hour to $9.80, the average household would see its food costs going up by just $32.96 a year.
  • Over three years, you might see a $20 restaurant meal go up by 45 cents.
  • The 20 million workers who can least afford that $32.96 a year, meanwhile, would have had their wages more than doubled, for tipped workers, or have gotten a 33 percent pay raise, for regular minimum wage workers.

Opponents of raising the minimum wage don't really care about whether minimum-wage workers can afford increased food costs, of course. They're trying to scare people who make enough more than minimum wage to not see their paychecks go up into thinking costs will go up, while seeming humanitarian. The reality is anything but—the people who want to keep the minimum wage low are the people who profit from keeping it that way, at whatever cost to workers.

Raising the minimum wage is popular with voters, in addition to being the right thing to do. But it's not going to happen as long as Republicans control the House. The choice is clear: We can have Speaker Pelosi and people who have been stuck making $7.25 for three years will get a much-needed raise. Or we can stick with Speaker Boehner and low-wage workers will stay stalled in poverty.

Let's take back the House and give minimum workers a chance at a raise. Please give our House candidates $3.

Original Article


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