After nearly a full year of pandemic-driven financial hardship for families and small businesses, the economy is in desperate need of a jolt. The most efficient way to stimulate it is to get money to those who spend it the fastest. Raising the wages of low-income workers will stimulate the economy, substantially lower the amount the country spends on social safety net programs, and reduce economic inequality—thereby unleashing additional economic growth in a period of recovery.
Policymakers often talk about the moral reason to raise the minimum wage: People making $7.25 an hour haven’t gotten a raise since 2009, the longest time the U.S. has ever gone without an increase. Millions of the essential workers who have kept the country going this year work for so little pay that they need food stamps to feed their families. But it’s not only about fairness: In the middle of the deepest economic downturn since World War II, raising the minimum wage also makes economic sense.
The above excerpt was originally published in Fortune.
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