Republicans in Congress and Kentucky’s legislature who think increasing the minimum wage would do more harm than good should reconsider in light of new evidence.
The huge and growing gap between haves and have-nots is stifling economic growth, says none other than Standard & Poor’s.
Boosting middle class purchasing power and lifting people from poverty is critical to strengthening the weak recovery, reports S&P, which has lowered its 10-year U.S. growth forecast from 2.8 percent to 2.5 percent in large part because of income inequality’s stifling effects.
S&P is no left-leaning think tank but a credit ratings agency that runs one of the most famous stock market indices and is wholly committed to capitalism. Says S&P: “A rising tide lifts all boats … but a lifeboat carrying a few, surrounded by many treading water, risks capsizing.”
Kentucky state revenue grew 2.2 percent last month, up from last fiscal’s year’s anemic 1.1 percent, but still below economists’ projections.
And no wonder. As Louisville economist Paul Coomes explained in a study for the Kentucky Chamber of Commerce, “Average pay per job continues to be an economic development challenge across Kentucky, with all nine regions posting slower growth than the United States.”
Spending is critical to economic growth, but people can’t spend what they don’t have. Too many Kentuckians are working full-time (or even multiple jobs) and still have to go to payday lenders to make ends meet. This starves local and state economies of the spending they need to support new jobs and businesses and to make the investments in education and infrastructure that build a prosperous state.
— Herald-Leader, Lexington