U.S. minimum wage hike a stimulus to economy: report
A higher U.S. minimum wage is providing a cushion to the economy when it is most needed, according to a report released on Thursday.
The Economic Policy Institute, a liberal think-tank based in Washington, said recent rises in the minimum wage have acted as a “stealth stimulus,” preventing the worst recession in generations from spiraling out of control.
The study found that the bottom-rung pay increases will boost spending by $4.9 billion.
Such findings counter conventional wisdom among economists, who tend to argue that mandated wage increases hurt businesses’ bottom line, putting a crimp on hiring.
On the contrary, say EPI analysts, who argued that further growth in low-end incomes would go a long way toward engendering an economic recovery.
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