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Monday 3 September 2012
Raising Minimum Wage Can Yank Millions Out of Poverty and Jump-Start Economy

Another oversize myth promoted by the fast-food industry and other low-wage employers is that raising the minimum wage hurts workers by increasing unemployment. Although it is theoretically possible to raise minimum wages enough to cause employers to hire fewer workers, there is hardly any indication from economic research that the proposed increase in the minimum wage would have this effect.

Employment in the overall economy depends on aggregate demand or spending, which is determined - especially in our currently weak economy - by macroeconomic policy, including the Federal Reserve, and fiscal policy.

And raising the minimum wage doesn’t only cut into profits, it also increases demand in the economy by moving income to workers who spend more than those who receive profit.

The EPI estimated that the proposed increase in the minimum wage would actually increase employment.

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