ARBOR WEALTH: Minimum wage debate obscures larger jobs issue

Published: Thursday, March 20, 2014 at 05:41 PM.

Uplifting a million Americans above the poverty line is a powerful idea. The cost of basic goods and services, like housing, food and fuel, has increased markedly, even though technically inflation is not rampant. We all know that living on minimum wage, even at $10.10 an hour, is a sketchy proposition at best.

Some economists believe that raising the minimum wage will boost the economy and increase discretionary spending. It’s hard to imagine, though, that minimum wage workers are going to plow a lot of cash into big-ticket items when they get a pay hike. It’s more likely that they will buy more and better food and cover their current expenses more expeditiously.

Still, pay should somewhat mirror living costs. And pay is lagging behind. It seems reasonable that we could lift the minimum wage to, say, $9 per hour, without doing irreparable harm to the economy.

Unfortunately, the debate diverts our attention from a much larger and more pressing issue:  how to recreate the decent paying, middle class jobs that can bring back the kind of salaries that allow a breadwinner to raise a family and pay for a child’s college education.

Margaret R. McDowell, ChFC, AIF, a syndicated economic columnist, chartered financial consultant and accredited investment fiduciary, is the founder of Arbor Wealth Management, LLC, (850-608-6121 — www.arborwealth.net), a fee-only and fiduciary registered investment advisory firm located near Sandestin. This column should not be considered personalized investment advice and provides no assurance that any specific strategy or investment will be suitable or profitable for an investor.

 

 



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