Reality Check
The Harry Potter Alliance posted a graphic on their Facebook page juxtaposing what people think about minimum wage workers vs. the reality of minimum wage workers (most are not teenagers, most work full-time, etc.). However, as I posted as a comment there and as I said when I shared the graphic on my own Facebook page, this graphic is not really adequate to communicate the benefit to raising the wages for the working poor so that everyone makes a true living wage. The folks actually making minimum wage are just the tip of the iceberg concerning who is helped by raising it.
1) When more of the money a large corporation makes goes to improve employee salaries, there will probably be less money available to pay dividends to stockholders. Dividends are capital gains and can only be taxed at about 15%. Those employees' paychecks are generally going to be taxed at anywhere from 20-28% (depending on how many kids a worker has, whether they can write off their mortgage interest, etc.) That increases the taxes being paid on that money by 5-13%, which means more money for the federal budget than if stockholders were the ones getting it.
2) More money in the federal budget means it's possible to pay servicemen and women more and invest in repairing our country's crumbling infrastructure, which means the creation of still MORE jobs paying a living wage.
3) Minimum wage workers making more money also means fewer working poor needing food and housing assistance, which means still MORE savings to the federal budget, more raises for those in the military, more repair to the infrastructure, etc. So far we're talking a win-win-win.
4) When workers are paid more, they also pay more to their local municipalities and state governments in taxes (in states that have an income tax, which a handful don't). This provides more money to pay police, fire fighters, teachers and other municipal workers, making their local community a safer, better-educated and in general nicer place to live.
5) When low-wage workers are paid a living wage their ability to help the economy and their local tax base by buying more goods increases, expanding the amount of money that is collected locally and statewide through sales taxes (the benefit of which is already explained above). The increased business also creates more jobs when business owners need to hire more people to keep up with the greater traffic they will experience. More new jobs created! (At a living wage!)
6) When these workers are able to buy more, the very corporations that increased their pay may very well find that they CAN give their stockholders dividends because of all of the additional business generated both through people having more money to spend AND the goodwill created by paying their employees more, which in turn also increases employee loyalty and longevity and skill.
Municipalities and states where the minimum wage has been increased to give workers a living wage experience a surge in their economies across the board. There is NOT runaway inflation or an increase in the cost of goods because of the other benefits outlined above.
To sum up--who REALLY benefits when the minimum wage goes up? EVERYBODY!
1) When more of the money a large corporation makes goes to improve employee salaries, there will probably be less money available to pay dividends to stockholders. Dividends are capital gains and can only be taxed at about 15%. Those employees' paychecks are generally going to be taxed at anywhere from 20-28% (depending on how many kids a worker has, whether they can write off their mortgage interest, etc.) That increases the taxes being paid on that money by 5-13%, which means more money for the federal budget than if stockholders were the ones getting it.
2) More money in the federal budget means it's possible to pay servicemen and women more and invest in repairing our country's crumbling infrastructure, which means the creation of still MORE jobs paying a living wage.
3) Minimum wage workers making more money also means fewer working poor needing food and housing assistance, which means still MORE savings to the federal budget, more raises for those in the military, more repair to the infrastructure, etc. So far we're talking a win-win-win.
4) When workers are paid more, they also pay more to their local municipalities and state governments in taxes (in states that have an income tax, which a handful don't). This provides more money to pay police, fire fighters, teachers and other municipal workers, making their local community a safer, better-educated and in general nicer place to live.
5) When low-wage workers are paid a living wage their ability to help the economy and their local tax base by buying more goods increases, expanding the amount of money that is collected locally and statewide through sales taxes (the benefit of which is already explained above). The increased business also creates more jobs when business owners need to hire more people to keep up with the greater traffic they will experience. More new jobs created! (At a living wage!)
6) When these workers are able to buy more, the very corporations that increased their pay may very well find that they CAN give their stockholders dividends because of all of the additional business generated both through people having more money to spend AND the goodwill created by paying their employees more, which in turn also increases employee loyalty and longevity and skill.
Municipalities and states where the minimum wage has been increased to give workers a living wage experience a surge in their economies across the board. There is NOT runaway inflation or an increase in the cost of goods because of the other benefits outlined above.
To sum up--who REALLY benefits when the minimum wage goes up? EVERYBODY!