Op-Ed By Norman W. Gorin
Milford Daily News (MA), February 16. 2014
The minimum wage is now at center stage both nationally and in Massachusetts, and the time for needed reform has come. The president made a compelling case to raise the wage in his State of the Union address, and here in Massachusetts, the State Senate passed a bill which will soon be taken up by the House.
Some business owners have expressed a fear that raising the minimum wage will slow job growth and hurt the economy, but that's not the case. In fact, the evidence shows that raising the minimum wage is a crucial engine for business growth and job creation, and the sooner it comes, the speedier will be the recovery.
The buying power of the minimum wage reached its peak in 1968 at $10.74 (in 2013 dollars). The unemployment rate dropped from 3.8 percent in 1967 to 3.5 percent in 1969. The next time the unemployment rate came close to those levels was after the minimum wage raises of 1996 and 1997. Business Week observed in 2001, Many economists have backed away from the argument that minimum wage [laws] lead to fewer jobs.
It begins with the simple fact that the demand for goods and services depends on people's ability to buy. Unless people at the bottom of the pyramid have enough money to buy what businesses are offering and thereby create demand, job growth will slow. Its a common-sense equation, but some business owners taking the short-term view are missing it entirely.
However, the benefit to business of a higher minimum wage goes beyond just the creation of demand, which is its most obvious impact. Other benefits accrue to businesses when their employees earn enough to get by. Increased productivity and lower turnover are linked with higher wages.
My company, located in Wellesley, creates health and wellness programs for the workplace which improve productivity by making the workforce healthier, cutting down on absenteeism, and lowering health care costs. Our product is a healthy, productive workforce, but that goal will always be unreachable if employees cant make ends meet on a full-time wage. ...
Norman W. Gorin is chairman and CEO of Instinct Health Science, Inc. in Wellesley.