Raising the minimum wage would help the working poor and give the entire economy a boost, a new analysis finds.
If the minimum wage rose to $10.10 per hour, as Senate Democrats and President Barack Obama propose, 27.8 million workers would see their wages go up as a direct or indirect result of the boost, according to the Economic Policy Institute, a left-leaning think tank. These workers would take home about $35 billion in additional wages and they would probably spend it, as low-income people living with little financial cushion tend to do.
The result: During the initial phase-in period, the U.S. economy would grow by about $22 billion, EPI found. The growth in the U.S. economy would result in about 85,000 new jobs, according to EPI. That counters arguments from conservative economists that raising the minimum wage could actually hurt the working poor by making employers hesitant to hire more workers. (A notion that’s been proven wrong by some economists and remains hotly debated.)
The analysis is an update to a similar report released by EPI earlier this year. It takes into account the fact that five states recently raised their minimum wage, meaning workers living in those states would feel less of an impact from a federal minimum wage boost than when EPI published the original research in March.0