How Living Wage Would Create Jobs

Millions of Americans work full time, but live in poverty. They don’t earn enough, even with full time work, to provide essentials, even though their work is essential to the functioning of our society.

The work these people perform is essential for the functioning of the society, yet it pays so poorly that no one can afford to live on it.

What would happen if all of those people were paid fairly, earning the full value of the work they do. The first thing, of course, would be that they would be lifted out of poverty. They wouldn’t suddenly be rich, but they would be able to pay for everything they really need, and there might even be enough for an occasional night out, or that new washing machine. This would reduce government expenditures. But something else would also happen.

If no one earned less than Living Wage, new jobs would be created. The new ability of the poor to buy the things they need would act exactly like Obama’s stimulus program, which created several million jobs.

If no one earned less than Living Wage,
new jobs would be created.

Over 47 million Americans are living in poverty. If all of these earners brought home a Living Wage of about $22/hour, the additional money they spent would create demand for goods. Low demand is the one and only reason that so few jobs are being created these days, so any new demand for goods would bring with it economic pressure for new jobs to meet the demand.

We should have no illusion that the formerly poor would lift us out of recession. The new jobs they would support would help, but would not cure the problem. For that, many more steps must be taken, such things as federal infrastructure programs, modernization programs, WPA-type initiatives, business tax breaks for newly created jobs, and so on—not to mention a shorter work week.

But Living Wage would do more than its share, first by lifting underpaid workers out of poverty, second by generating jobs to fulfill their new ability to meet all their needs, and third by reducing government expenditure. Such people would no longer need certain government help, and all of them would contribute additional crucial tax revenue to the national budget.

Can anyone defend a belief that the working poor should not be paid according to their true value to society?


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