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Increasing the minimum wage can do more than put more money in the pockets of workers. It can, in some ways, change their lives.
Amazon said Tuesday it would raise its minimum wage to $ 15 as of November 1, giving a pay rise to hundreds of thousands of US workers. The federal minimum wage has been set at $ 7.25 since July 2009 and, according to the Wall Street Journal, the starting wage for American workers ranged from $ 10 to $ 14 per hour.
"We listened to our critics, thought about what we wanted to do and decided to lead," said General Manager Jeff Bezos. "We are excited about this change and are encouraging our competitors and other major employers to join us."
Amazon's move says the public wants an increase in the minimum wage, said Jonathan Schleifer, executive director of The Fairness Project, a non-profit organization that advocates raising the minimum wage in the United States through voting initiatives. It will have an "incredibly deep" effect on the lives of 350,000 people working at Amazon
AMZN, -1.65%
he said.
Amazon's US employees earned about $ 34,000 a year last year, although Amazon's annual median wage is around $ 28,446 a year, including overall salaries, according to documents filed by the company. Securities and Exchange Commission. To put this in context: United Parcel Service Inc.
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reported median compensation of $ 53,433.
"Sole proprietors do what is right, that's fine, but it does not replace the low-wage policy," said Schleifer. "The success of voting initiatives in recent years shows that workers and businesses all know that we need to raise the minimum wage. Politicians seem to be the last people in America to not have received this message. "
Kathy Ortega, a fast-food worker in Arizona, said that after the vote on the minimum wage vote in 2016, she could spend more time with her family and no longer have to force her children to wear several layers of clothing in bed at night. can now pay his heating bills. "Two extra bucks make all the difference," she said in a video for The Fairness Project. "It gives me a springboard."
Having more money for utilities and rent seems to be an obvious benefit, but other impacts are more difficult to measure, Schleifer said. Salary increases of nearly $ 6 billion have been granted to workers in states such as Arizona and Colorado after wage-increasing voting initiatives were adopted in 2016.
Here are some of the less visible effects of such increases.
Keeping former prisoners from recidivism
Higher salaries prevent ex-prisoners from returning to prison, according to a working paper written by researchers at Rutgers University of New Jersey and Clemson University of South Carolina. An increase in the 50-cent minimum wage has reduced the likelihood of men and women returning to prison by one-third by 2.8 percent, the study found.
The increase in the minimum wage has reduced recidivism rates among those convicted of property and drug crimes, the crimes most often associated with people returning to prison, but who have not been convicted. Effect of violent crimes. The availability of state income tax credits also has major effects on newly released prisoners: when it has been increased by 5%, the likelihood of recidivism has been similarly reduced.
Improve mental health
The increase in the minimum wage can have long-term consequences for public health, including the improvement of mental health. Increasing the minimum wage was almost as useful as taking an antidepressant to improve the mental health of workers, according to a British study published in 1999 in Health Economics. "In fact, raising the minimum wage can be like putting antidepressants in water pipes serving millions of low-wage workers," said an analysis of the study.
Reduce staff turnover
Minimum wage positions have some of the highest turnover rates of any job, which can be costly for employers. When an employee leaves after a short time, the employer must pay to train a new employee, who will likely be less qualified and less effective initially than one who has spent more time at work, said Ben Zipperer , economist at think tank of the Economic Policy Institute.
"It's a huge deal for low-wage industries," he said. "As the labor market tightens, it will be harder for these companies to fill low-paying jobs."
A number of fast food restaurants, including Sonic
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Chic-fil-A, and
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have recently increased the minimum wage for employees, citing long-term cost savings and better customer service. "We have reduced the 90-day turnover rate to a very good level," said Steve Easterbrook, chief executive officer of McDonald's, at a 2015 earnings call following a salary increase. "That's where hidden costs can sometimes be generated if the turnover goes out of control."
Increase workplace safety
Frequent turnover can also lead to security problems, noted Zipperer. If beginning employees need to be repeatedly trained at work, they are more likely to make mistakes. This can be particularly troubling if they work in areas where safety is a concern, including the aviation industry, nursing, food security, and transportation, said a study from the University's Labor Center. Berkeley.
"Evidence indicates that higher wages result in reduced turnover and employee performance, which creates a safer environment for airport employees and the public," said L & # 's 39; study.
To enhance security, members of the New York Harbor Authority Board of Commissioners unanimously decided in September to increase the minimum wage by 2023 at JFK International, LaGuardia and Newark Liberty International. Workers at these airports will receive an increase of $ 2 to $ 4 per hour and are on the threshold of earning at least $ 19 per hour, the highest minimum wage target set by all organizations. of the country.
"The safe and efficient operation of the Port Authority's airports relies on a stable, motivated and engaged workforce that can enhance safety efforts and help customers in an experienced, competent and positive manner," Rick said. Cotton, Executive Director of the Port Authority.
Reduce child neglect
Increasing the federal minimum wage by $ 1 would result in a 9.6% reduction in 9,700 cases of child neglect and a further decrease in physical abuse, a study released in August 2017 concluded. by Indiana University. Policies that increase the income of the working poor have substantial positive effects on the well-being of children, especially young children, said Lindsey Rose Bullinger, Researcher and Assistant Professor at the School of Public Affairs. Indiana University.
"Money matters," said Bullinger. "When caregivers have more disposable income, they are better able to meet a child's basic needs, such as clothing, food, medical care and home safety."
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