In a piece released on Monday, Paul Krugman reflected on the decision by Walmart to raise the minimum wage of its workers. He notes that this will likely lead to many more companies following suit. Indeed TJ Maxx-Marshalls has already signaled that it will do the same for its workers this year.
More than moving business to act, these private sector initiatives signal that the economic arguments—reduced turnover, higher productivity, improved morale– for raising the minimum wage standard through public policy make good sense. As Krugman points out:
What this means, in turn, is that engineering a significant pay raise for tens of millions of Americans would almost surely be much easier than conventional wisdom suggests. Raise minimum wages by a substantial amount; make it easier for workers to organize, increasing their bargaining power; direct monetary and fiscal policy toward full employment, as opposed to keeping the economy depressed out of fear that we’ll suddenly turn into Weimar Germany. It’s not a hard list to implement — and if we did these things we could make major strides back toward the kind of society most of us want to live in.
The bottom line is that the choice to keep the minimum wage standard low as a matter of policy no longer makes sense for workers or businesses. It’s time for policymakers to follow these leaders and raise the minimum wage.