This morning I read an article on the impact of raising the minimum wage to $9/hour. As someone who hasn’t quite broken into the world of salaried professionals, raising the minimum wage to $9/hour would be great news. I’m all for workers rights and corporations paying a living wage. (Not that $9/hour is a living wage, but keeping up with inflation would be nice). According to the article, raising the minimum wage would give hourly wage earners more spending power, which would, in turn, boost the economy.
That’s great, except, we wage workers shouldn’t spend the extra couple of dollars on economy-boosting goods and services. We should be using the extra cash to take care of our family’s NEEDS, pay down debt, and save MOST of it for a rainy day. The United States (and many other western countries as well) absolutely depend on the spending habits of its citizens. This is a huge problem, considering the amount of people who are drowning in debt. If your debt is higher than your income, believe it or not, you cannot afford luxury items. (Yes, a smartphone is a luxury item.)
In this country, we are constantly overspending. And this overspending on cool gadgets, dining out, jewelry, fashionable clothing, new cars, random crap, etc., is what provides jobs and financial security to our wage earners. How can we live a sustainable lifestyle if our economy depends on the overconsumption of goods and services? I mean, what would our economy be like if people only purchased what they absolutely needed? Would there be people working? Would there be jobs? I dont know. I’m not advocating socialism, but our current system is really messed up.
Remember, you don’t have to be at mercy of the constant ebb and flow of our economy. If you think carefully about how you spend your money, you will be in a better position than most people riding the consumer bandwagon.