Minimum Wage Increases Today—10 Million See More Pay
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Today, nearly 10 million workers in 31 states get a raise when the federal minimum wage increases by 70 cents to $7.25 an hour.
AFL-CIO President John Sweeney says the raise will act as a significant economic stimulus “at a moment when it is critically needed—one that will lift all boats so Americans and businesses can stay afloat and ride out this economic storm.”
The raise will put an extra $2,000 a year into the paychecks of a full-time minimum wage worker. According to the Economic Policy Institute (EPI), that increase will generate $5.5 billion in consumer spending over the next year—providing a boost to the economy without any increase in government spending. This is money that will be spent, Sweeney says, on basic necessities such as groceries, electricity, rent and transportation.
This is not money that will be saved for a rainy day or spent on lavish vacations overseas. Now, that’s not a bad return on a 70-cent-an hour investment. Indeed, a 2008 study by the Federal Reserve Bank of Chicago confirmed that minimum wage increases boost consumer spending substantially more than tax cuts do.
