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At Costco, we know that paying employees good wages makes good sense for business, . . . We pay a starting hourly wage of $11.50 in all states where we do business, and we are still able to keep our overhead costs low."
That statement by Costco CEO and President Craig Jelinek is exactly what one would hope all CEOs and managers in this country would understand, but unfortunately is rarer then we would hope.

The minimum wage in this country is a far lower than it should be, and certainly lower than anything resembling a livable wage. President Obama has proposed raising it to $9.00 an hour but, thankfully, some Democrats propose raising it to $10.10 per hour. In both cases it would be indexed for inflation after that. Needless to say, the Republicans seem to be an unanimous opposition to any increase in the minimum-wage and the likes of Randall Paul oppose the entire concept of a minimum wage.

What is so odd about the debate is there is absolutely no objective information indicating that the minimum wage reduces employment or puts companies at a disadvantage. You don't need elaborate studies to understand this. Many states, such as Washington State and New York have enacted a minimum wage that is higher than the Federal minimum and yet we have seen no decline in employment levels in those states. In addition, if every employer has to pay the new minimum then no one is put at a disadvantage. In fact, the only real impact is on those who are already paying above the new minimum wage. They are no longer put at disadvantage by doing the right thing.

There is a truism about wages that is not lost on Mr. Jelinek. In advocating for increasing the minimum wage he said,

An important reason for the success of Costco’s business model is the attraction and retention of great employees, . . . . Instead of minimizing wages, we know it's a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty. We support efforts to increase the federal minimum wage."
A decent livable wage is not only good from the standpoint of employee morale and retention, it is good from the standpoint of Federal spending and the overall economy. Low wages and depressed earnings results in reduced consumer demand and consequently lower employment. In addition, the government subsidizes low wages with the earned income tax credit, food stamps, Medicaid and other programs which are designed to lift the working poor out of abject poverty.

It is time to enact a livable minimum wage. Nine dollars is not enough and even $10.10 is barely there, but it is a start.


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