Raising the minimum wage to $10.10 per hour will benefit the US economy

I wish him well and I know he will offer me a good challenge. This is, after all, the purpose of these debating engagements. As I stated in ROUND 1, I will be defending the position that increasing the federal minimum wage from $7.25 per hour to $10.10 per hour will mostly benefit the U. S. economy. It will increase the number of jobs in the United States and is likely to increase the nation's gross domestic product--this according to the congressional budget office's latest projections on such a hypothetical raise [1]--and it will have a mostly positive impact on low wage workers, or those that make minimum wage or less to about 5 times the poverty threshold [1]; to give you an example of what this means, raising the minimum wage to $10.10 per hour would not only directly benefit those making the new minimum wage but it would also benefit a single person family (working) that makes up to $68,825 per year, by putting more money in his pocket--this according to the congressional budget office's estimation [1][2]. And of course larger working families will see even greater monetary rewards [1]. But before we get into that discussion, I'm going to demonstrate in this ROUND why a minimum wage increase is badly needed and why failing to raise it will only continue to hurt the nation's workforce, which has seen the purchasing value of its wages go down over the last 30 years because of inflation [3][4]. Purchasing Power of the Dollar isn't what it used to beBecause of inflation, the vast majority of America's workforce has either seen the purchasing value of its wages stagnate or decrease steadily [3]; low wage earners have seen the value of their wages decrease the most [4]. In comparison, the nation's top 1% of earners saw their incomes rise by 31.4% from 2009 to 2012, comfortably exceeding the 9% inflation rate during that period [5][6]. While the value of earnings of the top 1% of earners outpaces the rate of inflation, the vast majority of working Americans are seeing the value of their wages stagnate (upper-middle class) or decrease (below). Income inequality in the U. S. is now at the highest its ever been since 1928 right before the Great Depression [5]. According to economist/professor Emmanuel Saez at the University of Berkeley, the top 1% of earners in the nation get 22.5% of all pre-tax income while 90% of remaining earners get less than half, 49.6% [5]! Low-wage earners have the seen the value of their wages decrease the most. For the last 40 years, the federal minimum wage has badly fallen behind inflation in real terms. Studies by the U. S. Labor Department, the Bureau of Economic Analysis, and the Pew Research Center have shown that, accounting for inflation, the current minimum wage of $7.25 is even less than what it was in 1968, when it had a value of $8.56 in 2012 dollars (see graph below) [5][7][8]. The U. S. Labor Department has concluded that today's minimum wage workers are paid even less in real terms because of inflation when compared to their 1968 minimum wage counterparts [8]! In fact, since it was last raised to $7.25 in 2009, the federal minimum wage has lost about 5.8% of its purchasing value due to inflation [7]. In a 2012 study, The Centers for Economic and Policy Research concluded that if the minimum wage had kept pace with inflation since it was first enacted in the 1930s, it would now be at $10.52 an hour [5]. To provide an accurate sense of how badly lagging behind the federal minimum wage now is, in 1968 a full-time minimum wage worker earned about $20,000 per year in today's dollars; today a full-time minimum wage worker earns about $15,000 per year [4]. In 1968 a full-time minimum wage worker earned about half of the average annual income during that period; today a full-time minimum wage worker earns about 37% of the average annual income [4]. A steady decline. While the price of food, services, goods, and healthcare go up both in terms of cost and inflation, the purchasing power of the federal minimum wage has significantly eroded over the years [3]. While the average price of the McDonald's Big Mac has risen from $2.71 in 2004 to $4.62 in 2014--an increase of 70.1% over 10 years--the federal minimum wage has only increased by $2.10 to its current rate over the same period, or by 41% [9][10]. Over the years these less than adequate minimum wage increases accumulate and they create poverty were previously there wasn't any or where it was less pronounced. As the graph above shows, when accounting for inflation, the current minimum wage has less purchasing power now than it did in the late 1960s. In order to rectify the reduced value of the minimum wage, it needs to be elevated to at least $10.00 in today's dollar value! Failure to do so will only expand poverty in America and deepen the crisis facing low wage workers. Raising the Minimum Wage to $10.10 would directly benefit 21.4% of the workforceCurrently 3.8 million workers are paid the nation's minimum wage, but raising the wage to $10.10 would directly benefit 21.4% of the workforce--about 30 million workers--by putting more money in their pocket [5][4].21.4% of the nation's workforce would now have more money in their pocket; the accumulated losses caused by inflation over the years straining the minimum wage worker would be effectively eliminated! A fierce proponent of this idea, the current President has advocated tying this proposed minimum wage hike to inflation, that way any adverse effects created by inflation are effectively handled [11]. This is an even better idea! Recognizing the current crisis facing the nation's million of low wager earners, President Obama has already signed an exectuve order raising the minimum wage for federal workers from $7.25 to $10.10 [11]. The rest of the nation should follow this example. Who directly benefits? As of 2012, 49% of all minimum wage workers are 25 years old or older (see graphic below); however, in excess of 85.5% of these workers are 20 years old or older (not teenagers) [7]. 55% work full time [4]. But of course many more people making less than $10.10 per hour would see a pay raise. As I stated earlier, nearly 30 million workers would get a pay raise with the minimum wage increase, 9 million of whom are parents [4]. 57.3% of those who would be effected are women [7]; a low minimum wage is one of the reasons why females continue to make 77 cents per dollar that a man makes [12]. Increasing the minimum to $10.10 would help close that gap by 5% [12]. And increasing the minimum wage is the sensible thing to do. Already 19 U. S. states and the District of Columbia have a higher minimum wage than the federal minimum [7]. Numerous business executives and CEOs are in favor of raising the minimum wage to $10.10. Cosco President and CEO, Craig Jelenik, has come out in favor of this proposal by President Obama, stating "Instead of minimizing wages, we know it’s a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty" [5], as have executives of GAP [12]. 85% of small businesses already pay wages higher than the minimum [4]. Conservatives estimates by the congressional budget office (CBO)--a federal agency within the U. S. government that provides economic data to congress--places the total immediate gains of raising the minimum wage to $10.10 at $5 billion for working families that make less than the poverty threshold (live in poverty); their income would increase by about 3% and 900,000 people would be moved above the poverty threshold [1]. The CBO also projects that families making one to three times the poverty threshold would see $12 billion in additional real income; families making three to six times the poverty threshold would see $2 billion in additional real income [1]. Overall, the CBO estimates that the nation's poverty would be reduced and that a total of $2 billion would be immediately added to the U. S economy because of the minimum wage increase [1]. [1] . http://cbo.gov...[2] . http://aspe.hhs.gov...[3] . http://www.epi.org...; [4] . http://www.epi.org...;[5] . http://www.mybanktracker.com...;[6] . http://www.bls.gov...;[7] . http://www.pewresearch.org...[8] . http://www.dol.gov...[9] . http://news.yahoo.com...[10] . http://www.bls.gov...[11] . http://www.foxnews.com...[12] . http://www.whitehouse.gov...