How does raising the minimum wage benefit the economy?
Minimum wage increases stimulate the economy by increasing consumer spending without adding to state and federal budget deficits.
Consumer spending drives 70 percent of the economy, and increasing demand is key for jumpstarting and maintaining production and hiring. A raise in the minimum wage puts money into the pockets of low-income consumers, who immediately spend it at local businesses.
The Economic Policy Institute estimates that the Raise the Wage Act, which would raise the federal minimum wage to $12 per hour by 2020, would result in wage increases totaling more than $79 billion for roughly 35 million workers in communities across the country. Raising the minimum wage helps strengthen the economy without increasing taxpayer costs.
Six of the top 10 growth occupations projected by the U.S. Bureau of Labor Statistics for the next decade are low-wage jobs, including home health aides, customer service representatives, food preparation and service workers, personal and home care aides, retail salespersons, and office clerks. Raising the minimum wage would boost pay scales in these types of jobs, where millions of working men and women now spend their careers.