If companies really want to help improve their economic growth prospects, they’ll give serious thought into higher wages for their employees, says Harold Meyerson at the Washington Post. While luxury consumer good industries are thriving off the back of increases in upper-class wealth, large scale retailers who market toward lower-income groups are struggling as low-income families are forced to spread their budget thinner. Meyerson takes a look at historical evidence to suggest how raising minimum wages may help.
“While Americans with money are boosting both the housing and auto markets, the growing number of Americans without are curtailing their shopping.” Meyerson looks at what companies did in the 1920-1930s when faced with a struggling middle class and lower profits. Companies then decided to raise workers' pay to encourage more spending.
"In the ’20s, Edward Filene, whose family owned both its eponymous chain and the Federated Department stores, called for the establishment of a minimum wage,unemployment insurance, a five-day workweek, legalized unions and cooperatives where people could do their banking. (He helped establish some of the first banking co-ops himself.) The Straus family, which owned Macy’s, and shoe-magnate Milton Florsheim endorsed similar measures and were among the more prominent business leaders who supported Franklin Roosevelt’s New Deal. They were well compensated for their clear understanding of how to make an economy thrive: During the 30 years of broadly shared prosperity that the New Deal reforms made possible, department stores catering to the vast middle class were a smashing success.”
Copyright 2015, Deseret News Publishing Company