Raising the minimum wage has become a central issue in the nation’s economic growth debate. The income disparity that has accelerated in the past 30 years has resulted in an impoverished working class and a middle sector in debt which cannot sustain its living standard. This is not a recipe for a healthy economy.
The clamor for a living wage was heard loud and clear yesterday in hundreds of cities across the nation. The minimum wage lost long ago its romantic image as a salary for teenagers in part-time summer jobs, or as an entry-level compensation for people starting their careers. Many of those jobs are now held by parents.
The tax policies that have reduced taxes on capital gains and on the top-tier earners, the “winner takes it all” business philosophy, and the diminishing influence of unions have brought this precarious economic model.
The recent economic recovery has only increased the model of disparity. The flag of discontent that was once raised against Wall Street has now landed in the daily struggle for the minimum wage.
It is necessary to turn back the economic tendencies that have prevailed for the past decades in which production was favored above demand, breaking the previous tacit balance between workers’ compensation and that of the executives of the same company.
Workers’ wage empowerment will be a shot to the economy. The worker’s additional income to the minimum wage is usually spent quickly in essential products. This kind of flow of money is more beneficial and stable in the long term that the sporadic acquisitions of luxury goods of a minority.
A change in the tax and compensations policy oriented towards the purchasing power of the lower-income sector will strengthen the middle class and will provide more economic stability. This starts with the living wage.