Democrats, Experts, Small Business Owners Highlight Economic Benefits of Raising the Minimum Wage at Forum


WASHINGTON – Today, Ranking Member Robert C. “Bobby” Scott (VA-03) held a forum, along with other Committee Democrats and House Democrats, to highlight the business and economic benefits of raising the federal minimum wage. Leading economists say that a modest increase in the minimum wage would improve worker productivity, and reduce employee turnover and absenteeism. It would also boost the overall economy by generating increased consumer demand.

In tandem with today’s forum, Committee Democrats released a new fact sheet on the economic benefits of raising the minimum wage.

“There is no question that working families would benefit tremendously from raising the minimum wage,” said Ranking Member Bobby Scott (VA-03). “Republicans often claim you can’t raise the minimum wage because it’s going to kill jobs. As the witnesses here today testified, that argument is absolutely contradicted by the evidence. We’ve raised the minimum wage 22 times since 1938 – and throughout that time our GDP per capita has steadily increased. The fact is that businesses and the overall economy would also benefit from a modest increase in the minimum wage.”


There is strong support among businesses for raising the minimum wage. Republican pollster Frank Luntz conducted a poll – highlighted by The Washington Post – which found that 80 percent of business executives in local chambers of commerce supported increasing the minimum wage. Another national poll of small business owners – conducted by Lake Research Partners for the American Sustainable Business Council and Businesses for a Fair Minimum Wage – found that 67 percent support an increase. 


Carmen Ortiz Larsen, President of AQUAS Inc. and Chair of the Board of the Hispanic Chamber of Commerce of Montgomery County, Md., testified at the forum.


“We found that it was smarter business policy to raise wages for lower paid jobs,” said Ortiz Larsen. “The results were better staff morale, a more stable workforce, improved performance and better customer service. I don’t want my government supporting policies like an inadequate minimum wage that promote poverty, weaken consumer demand, and ultimately hurt my business and other businesses. We have to set a reasonable wage floor.”


Research shows that raising the minimum wage improves worker productivity and reduces workforce turnover. High turnover can significantly affect a company’s bottom line, even in low-wage jobs. An analysis by the Center for American Progress estimates that the cost to a business of replacing a minimum wage worker is $2,400. Dave Cooper, Senior Economic Analyst at the Economic Policy Institute, shared some of that research at today’s event.


“Raising the federal minimum wage to $12 by 2020, as the Raise the Wage Act would do, would restore the national wage floor to the same relative position that it had in the late 1960s,” said Cooper. “Under conservative assumptions for wage growth at the median, $12 in 2020 would be equal to roughly 54 percent of the full-time median wage, bringing low-wage workers closer to the pay of a middle-class job, and helping undo some of the growth in wage inequality that has taken place since 1968.”


Scott Nash, a business owner with stores in Virginia, Pennsylvania, Maryland and D.C., testified about how raising the minimum wage has impacted his company.


“We have gradually increased our hourly minimum wage from $8 to $11,” said Nash, Owner of MOM's Organic Market. “MOM’s is the most profitable we’ve ever been. Our retention rates have skyrocketed, which has driven down our training and hiring costs. Our workforce is more productive, engaged and dedicated. Customers love shopping at places with engaged employees. Raising the minimum wage will increase American productivity, improve the lives of hardworking people, decrease the number of full-time workers on public assistance, and grow consumer spending, businesses and the economy.”


Sherry Stewart Deutschmann, CEO and Founder of LetterLogic, Inc. in Nashville, Tenn., echoed Nash’s testimony.


“When employees are paid a wage they can live on, they are better able to focus on the demands of their jobs,” said Deutschmann. “The quality of the goods and services they create is much better and we have been able to build customer loyalty to the point where the company can be more profitable and sustainable. When I pay a starting wage of $16 plus benefits my employees have more money to spend at other businesses. The very least other businesses can do is pay a wage that allows their employees to afford the basics. The federal minimum wage, which Tennessee follows, has not been increased since 2009. Raising the minimum wage is good for business.”


In the House of Representatives, 174 Democrats support the Raise the Wage Act, yet not a single Republican supports the bill. However, in many states, raising the minimum wage has not been a partisan issue. Twenty-nine states and the District of Columbia now require employers to pay a minimum wage that is above the current federal minimum wage of $7.25 per hour. Nationwide, more than half of all Republicans, 73 percent of Independents, and 92 percent of Democrats support increasing the minimum wage to $12 by 2020. Earning fair wages should not depend on where you live or winning the boss lottery. Every hardworking person deserves a fair wage.



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