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Workers need wage raise to cope with cost of living

Submitted by Jacob Ellerbee on February 28, 2013 – 12:21 pmNo Comment

During President Obama’s 2013 State of the Union Address, he outlined a proposal to gradually increase the minimum wage from $7.25 to $9 per hour by 2015. Beyond 2015, the president said he would like to see the minimum wage become indexed based on inflation rates. This means wages would fluctuate based on the rising cost of living.

The increased minimum wage is expected to help nearly 15 million workers in America, which is why Congress should pass the president’s proposal through.

According to a White House fact sheet released after the president’s proposal, for a family that earns $20,000-$30,000 per year, the extra $3,500 will help pay for things such as groceries, utilities, gasoline and clothing for a year or six months of housing.

The fact sheet also says that of all the workers benefiting from the increased minimum wage, 60 percent will be women and slightly less than 20 percent will be teenagers.

According to a 2012 study conducted by the Center for Economic and Policy Research, minimum wage should be around $21.72 per hour based on worker productivity – a far cry from the current national standard of $7.25.

However, many pundits question whether or not small businesses – the mom and pop stores sprinkled across America that this country prides itself on – can survive a federally-mandated minimum wage increase. Most of these already struggling stores are having a difficult time paying their bills, paying salaries and keeping up with big-box store competitors.

So, would the risk be worth the reward for these mom and pop stores?

By 2015, when employees will be making $9 per hour for entry level positions, more experienced employees will need to receive a wage increase as well, to be competitive and fair. So, someone making $9 per hour in 2013 might make $11.25 per hour in 2015.

These small businesses will have to find some way to allocate more money to pay their employees. It’s not all bad news, however. Potential customers will have more money in their pockets to spend and hopefully boost a staggering economy.

According to the Small Business Administration, there are 23 million small businesses in America and they account for about 54 percent of all sales in the United States. In addition, small business have provided 55 percent of all jobs in the U.S. since the 1970s.

For Uncle Sam, this delicate situation creates many questions.

Do you help nearly 15 million Americans by giving them at least $3,500 in wage boosts per year? Will the minimum wage increase be worth risking 23 million small business?

Because more than half of all sales in the U.S. come from small businesses, it’s important that the government gets this right. The U.S. can not afford to fall into another recession. Whether or not 15 million Americans receive a wage boost may very well decide the future of this country.


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