Some new research stacks recent Wall Street bonuses (just their bonuses) next to the total earnings of every full-time minimum wage worker in the United States. My takeaway, crazy as it may sound, is that we should start thinking a little more like Wall Street when it comes to economic policy.
First of all, WTF? Am I losing my mind, or didn’t Wall Street’s shady dealings contribute hugely to a global economic meltdown that affects most people to this day?
Oh, but hey! Here’s a nugget of hope. Take a moment to don your investor cap and, á la Wall Street, consider three words: Return. On. Investment.
The researchers’ logic is as follows: Low-wage people spend most, if not all, of their money because they have to. It’s how they pay for a place to live, feed their families, clothe their kids, and so on and so forth. That spending has a stimulative effect on the economy.
High-income people can afford to stash extra cash (like fancy Wall Street bonuses) because they’re still human beings with the same basic needs, and beyond that, there’s only so much needless luxury crap they’re willing to buy. The money they’re not spending brings no additional value to the economy.
Every dollar going to low wage workers adds an estimated $1.21 to the economy whereas each dollar going to high-income households adds only $0.39.
The point? Maybe the minimum wage should be less, well, minimal.