Legislative Testimony on Minimum Wage Increase
Our Research Director Lori Pfingst, PhD., testified yesterday before the House Labor & Workforce Development Committee. She testified in support of HB 2672, which would increase the minimum wage.
Here are her remarks:
"There are two main points I would like you to take away from my testimony –
(1) a minimum wage increase is good for Washington state’s economy; and
(2) a minimum wage increase would help more Washingtonians meet their basic needs.
First, a minimum wage increase is good for the economy.
- Minimum wage is one of the most studied topics in all of economics. The most sophisticated and well-done studies, as well as meta-analyses of those studies, supports the following:
- That raising the minimum wage would boost the paychecks of low wage workers, which are very likely to be spent immediately in the economy. That spending would, in turn, likely benefit local businesses by driving more demand for goods and services, which is what businesses say they need to do more robust hiring.
- The research also supports that raising the minimum wage can be accomplished with no discernible impact on employment. There is ample evidence that increases in the minimum wage – such as the one described in this bill – is typically absorbed by employers.
- Most economists agree that raising the minimum wage would reduce wage inequality and poverty. Wages and median income have been stagnant for over four decades, in spite of substantial economic growth and gains in productivity over that same time period. This is not a sustainable model for a strong economy. A strong economy is dependent on the benefits of economic growth being shared with people at all income levels, which serves as the basis for social mobility. Raising the minimum wage sets the floor by which all other wages are based on.
increase would also likely reduce poverty. Today, a parent of two
young children, who works full-time earning the minimum wage, would make
just below the poverty line. Raising the minimum wage according to HB
2672 would move them over the poverty line and we would likely see a
small, but significant decrease in the poverty rate over time.
In closing, I want to remind us that the well-being of businesses and workers are interdependent, not mutually exclusive. Workers who play by the rules and work hard should be able to meet their basic needs and have the opportunity to get ahead. When they are able to do that, they also contribute to their local economies. Businesses need customers. The more customers, the greater the demand for goods and services, and the more likely businesses are to thrive."Watch her testimony on TVW here.