According to a new report by the Economic Policy Institute, an increase in the minimum wage to $10.10 per hour would lift wages for millions of Americans while also providing a boost to the economy.
According to the Economic Policy Institute, the Fair Minimum Wage Act of 2013, a bill introduced by Sen. Tom Harkin (D-Iowa) and Rep. George Miller (D-Calif.) that would raise the federal minimum wage in three incremental increases of $0.95 from its current level of $7.25 per hour to $10.10 per hour, would affect 27.8 million workers, directly or indirectly distributing $35 billion in additional wages over the phase-in period to the working class.
The documented spending habits of the working poor indicate that this money would most likely be put back into the economy, as low-income people living with little financial cushion tend to spend more as discretionary income accumulates.
The EPI report assessed that the national economy would grow by about $22 billion during the beginning stages of the Fair Minimum Wage Act, resulting in about 85,00 new jobs created as a consequence of increasing affluence in the blue-collar pocket. While conservative economists argue that a raise in the minimum wage would make employers reluctant to hire more workers, the resulting growth of such a wage hike on the overall economy would overwhelm such a contraction in the labor force.