Raising the Minimum Wage "Pays for" Extended Unemployment Insurance

Today, the working poor receive $3-7 Billion in federal assistance. The real number is probably higher than that, but the savings from raising the minimum wage is not likely to be 100 percent. So, let us call it $5 Billion.
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When the sequester first bit, Members of Congress suddenly realized that they, along with the rest of us poor sots, would be standing on long airport lines due to reduced funding for sufficient numbers of TSA inspectors.

What happened? What do you think happened? Faster than one can say "Rand Paul," money to maintain the TSA workforce magically appeared, Members of Congress did not have to wait in long lines and the right-wing returned immediately to trashing federal expenditures for the rest of us.

Where, pray tell, did all this money come from? It was "taken" from long-term projected spending on airport improvement and other accounts, threatening our long-term competitiveness (unless Congress misleads itself again and restores the construction money), while enabling Members of Congress to flit back-and-forth across the country to achieve nothing on behalf of the American people.

Overall, not a very good investment.

What if we used that same creativity to pay for a good investment, assistance for those unlikely to benefit from shorter airport security lines -- the unemployed? We can do this without raising taxes and without stealing from future airport construction and actually achieve something -- 0.4 percent better GDP, and more than 200,000 jobs according to the Congressional Budget Office.

Today, the working poor (those who work 40 hour weeks but do not make sufficient income to support their families) receive $3-7 Billion in federal assistance. The real number is probably higher than that, but the savings from raising the minimum wage is not likely to be 100 percent. So, let us call it $5 Billion.

If we save $5 Billion from raising the minimum wage, in 5 years those savings alone pay for a one-year extension. Indeed, we can do it for two years and have no negative impact on our 10-year debt projections.

Moreover, with the improvement in GDP that the improved purchasing power of the newly minimum-waged produces, and the growth of jobs reducing the numbers of unemployed, the impact of this "trade-off" is a net positive with respect to ratio of debt to GDP, a far more important measure of the country's financial status than either GDP or debt alone.

Overall, a damned good investment.

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