Last week I heard a conversation between two southern gentlemen, and oh how I wish there were more like them -- Bill Moyers and Charlie Rose. The part of the conversation I want to focus on now was about minimum wage. Charlie asked about it and Bill responded, without hesitation, that it should be raised to at least $15 an hour. Charlie countered that if that were to happen, competition in the global market would make our products too expensive. Bill countered that if the U.S. were to raise the minimum wage to a living wage it would put more money into circulation and improve the general economy. If you raise the minimum wage, workers receiving those wages would have more buying power, and taxes on those increased wages would improve social security accounts and local government treasuries that depend on sales tax . Instead of corporations, and corporate owners, hogging revenue and stashing it away in investment banks and just sitting on it, that revenue would circulate and improve the common good. Manufactured goods would cost more, but the offset in increased circulation and sales tax would improve the bottom line for communities, businesses, and the common good.
But buying those products with increased costs would be impossible for those on social security incomes if the chained CPI is adopted. The chained CPI says that when the costs of goods goes up, we look for cheaper substitutes. Cheaper substitutes are not made in America, are not made by people earning a living wage, are not made by people with employer provided or national health care. The so-called middle class, really the middle-lower class, barely gets by because discount stores like Walmart have taken over the mass retail market. If Walmart were to start paying employees (and their supply chain manufacturers!) a living wage, and by the way include health care to all employees, their prices would go up. And if the CPI does not keep pace, the middle class loses out again, falling farther and farther behind. And the general economy falls behind, as retail sales decline.
So it's all about getting money into circulation and keeping it there. And that means distributing it to those who depend on it for daily life. Continuing to hoard money in the richest coffers does nothing useful. It only continues to push us on that sad spiral of wealth inequality, which leads to Brazilian and Egyptian-style revolts. I really don't think we want to go there. We need to increase the minimum wage, and if anything, increase the consumer price index.