Rob Horowitz: Minimum Wage Boost Good for Rhode Island Economy
Tuesday, June 26, 2012
The minimum wage increase signed into law last week by Gov. Lincoln Chafee is a step forward, providing a bit more take home pay to some of our state’s hardest working people and giving our state’s economy a small shot-in-the arm.
As of 2013, Rhode Island’s minimum wage will increase by 35 cents, rising to $7.75 an hour. This five percent increase is the first boost in the minimum wage in five years. This increase will have a direct, positive impact on the 10,000 Rhode Islanders who now earn minimum wage. Contrary to what some observers argue, the overwhelming majority of people who earn the minimum wage are adults—not teenagers—and many of them are struggling to support families. Further, this lift in the minimum wage will put some needed upward pressure on other wages near the bottom of the earning scale. The modest increased demand for goods and services by these wage earners will have a small, positive ripple effect throughout the Rhode Island economy.
While opponents of boosting the minimum wage raised the specter of job losses during the debate in the General Assembly, five separate academic studies confirm that minimum wage increases do not result in net job losses—even in times of high unemployment. In addition, the minimum wage in Connecticut and Massachusetts will still be higher than Rhode Island's after the increase goes into effect.
Raising the minimum wage by itself will not solve the tough economic challenges Rhode Island faces. Only a comprehensive, long-term economic strategy that includes improving our educational system; upgrading our existing workforce through custom job training and adult literacy efforts; repairing and improving our infrastructure; leveraging our public colleges as incubators of new businesses; fostering entrepreneurship; and ensuring fiscal responsibility at all levels of government will produce lasting results.
Still, this minimum wage boost provides a needed lift to people who work hard and play by the rules, but still struggle every day to just get by. Governor Chafee and the General Assembly are to be commended for this sensible, if modest, step.
Rob Horowitz is a strategic and communications consultant who provides general consulting, public relations, direct mail services and polling for national and state issue organizations, various non-profits and elected officials and candidates. He is an Adjunct Professor of Political Science at the University of Rhode Island.
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