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A $10.10 or higher minimum wage will boost Florida’s economy, create more jobs and reduce government social costs.

By       Message Farid Khavari       (Page 1 of 2 pages)     Permalink    (# of views)   1 comment

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A $10.10 or higher minimum wage will boost Florida's economy, create more jobs and reduce government social costs.

 

Independent Florida governor candidate, economist Farid Khavari, says conservatives should embrace higher minimum wages even more fervently than liberals do. Holding down wages has vastly increased government's costs of corporate welfare.

Since 1968, the minimum wage has in Florida officially declined by almost 25% in inflation-adjusted dollars. And that's the inflation that the government admits to.   1968's $1.60 per hour would be $10.20 in today's dollars, compared with Florida's new $7.93 which went into effect this year. The $7.93 represents a whopping 14-cent raise over 2013.    

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Florida's Republican governor Rick Scott says he "cringes" whenever the topic of raising the minimum wage comes up.   That is no surprise, because Scott has repeatedly demonstrated his lack of concern for anyone without a million-dollar checkbook, his decision to sacrifice over 6,000 lives per year and thousands of jobs in the name of ideology, and his ignorance of simple economics.  

In his 2006 campaign for governor (as a Republican) Charlie Crist was silent on raising the minimum wage. In his reincarnation as a Democrat, Crist now says "we have to do more."        

Ironically, the people who most strongly oppose raising the minimum wage are the same people who are horrified by the expansion of the Food Stamp program, Medicaid, and other forms of social costs (often called "socialism") which lead to higher deficits, higher taxes or both.  

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In fact, holding down the minimum wage has greatly expanded corporate welfare in America, which costs us more than we know.   According to research by the University of Illinois and UC Berkeley, taxpayers subsidize the employers of low-wage workers by $243 billion per year because their wages are so low that the workers qualify for $243 billion in Medicaid, Earned Income Tax Credit, Food Stamps and Temporary Assistance.  

Interestingly, 73% of families receiving these benefits are working.   This means that taxpayers enable big corporations to shift their labor costs onto the public. This is exactly the definition of corporate welfare.  

That's right, taxpayers are already paying for a higher minimum wage, but the employers get the extra money rather than the workers.   If the employers pay workers more, the social costs to taxpayers would be reduced.   Reducing social costs to the taxpayers ("socialism") is a core tenet of conservatives, right?

Are those working people who receive government benefits the "takers"? Or are the "takers" the corporate welfare recipients who save $243 billion per year on labor costs subsidized by the taxpayers?

The Congressional Budget Office says that raising the minimum wage would benefit about 15% of workers, and raise 900,000 people out of poverty.  

What are the real economic benefits--or consequences-- of raising the minimum wage?

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We have all heard that people will lose their jobs. We all worry about the price of a Big Mac.  What we don't hear much about is the fact that putting more money into the hands of people who will spend it increases economic activity much more than it costs.  

In Florida, $10.10 is about $86 per 40-hour week than $7.93, about $4,500 per year.   About 1,000,000 Florida workers, including many who earn more than the current minimum wage, would benefit by raising the minimum wage to $10.10 by 2016. Let's say the average benefit is only $3,000 per worker per year, which makes $3 billion per year in increased pay.  

But when that $3 billion circulates and recirculates through Florida's economy, at least $15 billion per year in economic activity happens--enough to support 150,000 new jobs in Florida.

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Farid A. Khavari, Ph.D., is a noted economist and independent candidate for Florida governor in 2014. He is the author of 10 books including Environomics: the Economics of Environmentally Safe Prosperity (1993) and Toward a Zero Cost Economy (more...)
 

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