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Study: Raising Minimum Wage Would Make WV Economy Work Better

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Friday, October 18, 2013   

CHARLESTON, W.Va. – Raising the minimum wage would help the state's working poor and in the process, improve the economy for everyone, according to a new analysis.

Sean O'Leary, policy analyst with the West Virginia Center on Budget and Policy, is the author of the new report, Giving West Virginia's Workers a Raise.

It highlights a big gap between rich and poor that is dragging both groups down.

O'Leary says boosting wages at the bottom would help more than 100,000 of the people who need it most.

"We're not talking about part-time workers, kids working summer jobs for spending money,” he says. “We're talking about adult workers, working full-time, who are supporting their families."

O'Leary adds raising the minimum wage is not a silver bullet, but it would help slow the erosion of the middle class and strengthen an economy that he sees as badly out of balance.

Several states have raised their minimum wages, although West Virginia isn't one of them, and there's a proposal in Congress to raise the national minimum wage to $10.10 an hour.

Critics say that would increase unemployment and inflation. But O'Leary says economists have studied the topic extensively and have found that isn't the case.

He points out that the businesses paying the higher wage make the money back almost immediately.

"When Wal-Mart pays their employees more, they turn right back around and spend that money at Wal-Mart," he explains.

O'Leary’s analysis also finds raising wages at the low end is actually only a small expense for businesses that is often covered by reduced turnover and training costs.

"There's less turnover, there's less vacancies, there's fewer training and hiring costs,” he explains. “That really saves them a significant amount of money, in some cases, completely offsetting the cost of increasing the minimum wage."

The report says raising the wage even to $8.50 an hour would benefit 120,000 workers in West Virginia – many, O'Leary adds, in families being left behind by the decline in well-paid industrial jobs.

"By raising the minimum wage, you're giving those working families an opportunity to work their way out of poverty,” he says, “where right now, there's very little they can do."




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