$5 Billion Out of $14 Trillion Economy.
The minimum wage will have a tiny impact on the economy, big impact on individuals.
July 29, 2009.
Last Friday the new minimum wage went into effect, raising the base pay for most hourly jobs from $6.55 and hour to $7.25 an hour. That's not a lot of money fo sure -- 70 cents an hour times a 40 hour work week, means that an employeer will be asked to pay $28 more a week for each employee, on top of the previous minimum wage of $262 weekly.
Not a lot of money for sure. Certainly there will be some struggling businesses that will have to lay off a person here or there to make up for the additional $28 a week they have to pay a person, but not many. Relatively few workers make minimum wage -- indeed on NPR's Weekend Edition an economist estimated the impact on all American businesses would be less then $5 billion aggregated. A small fraction of the economy indeed.
The additional income will spur new spending. It also will mean less suffering for some of the hardest working American out there. People deserve a basic wage, as just part of basic human dignity and respect. It may be hard for small businesses, however they can adapt. Human dignity is more important then the impact on a few small businesses.
