Minimum wage hike good for economy, taxpayers

If corporate America was still run by businessmen like Henry Ford, we probably wouldn’t need to have a minimum wage law.

Ford, said Congressman Jim Langevin recently, “wanted his workers to earn a wage that was sufficient for them to buy an automobile that he produced. He recognized with a strong middle class, with a strong working class, that the economy does better, and his company did better.”

Of course, somewhere along the way the business ethic of Henry Ford was subverted by that of the Koch brothers – making a meaningful minimum wage more important than ever to the American economy.

“Raising the minimum wage is trickle down economics that actually works,” Langevin said.

He and his colleague Congressman David Cicilline are both co-sponsors of a bill that would gradually raise the federal minimum wage from $.725 to $10.10 by 2015. Here’s why:

Cicilline said raising the minimum wage would have a direct affect on the small businesses economy in Rhode Island.

Kate Brewster, of the Economic Progress Institute, said raising the federal minimum wage would benefit 72,000 Rhode Islanders. She dispelled the oft-repeated myth that most minimum wage workers are teenagers saying only one in five is younger than 20.

Brewster also echoed Cicilline’s point about how it would boon for local small businesses saying, “Putting more money in the pockets of workers will put more money in the cash registers of local business, which will help to create jobs here in Rhode Island.”

And in yesterday’s Wall Street Journal, Ralph Nader even showed how raising the minimum wage can lower our taxes:

Corporations pay their workers such low wages that the workers can’t afford to buy the food, pay the rent, or get the health care they need. Consequently, these employees increasingly turn to the taxpayer-funded government safety net via food stamps, Medicaid, the earned income tax credit and housing-assistance programs. Taxpayers end up footing the bill for the unconscionably low wages paid by profitable corporations.

Wal-Mart, which grossed $318 billion in the U.S. last year, provides its workers with technical advice about how to apply for this public assistance. For responsible businesses to subsidize the low wages of their larger competitors is a complete perversion of capitalism.

Corporations like Wal-Mart have no problem making profits while paying the higher $10.25 minimum wage in Ontario, Canada, just across the border from Buffalo, N.Y.

In short, raising the minimum wage is good for workers, communities, economies, small businesses and good government. On the other hand, it will mean less massive profits for McDonalds and Walmart.