- Raising the wages of my employees helped our business and the local economy.
- Millions of Americans are living in poverty while working full time.
- Congress must raise the minimum wage to $15 dollars an hour to ensure a swift economic recovery.
- John Driscoll is the CEO of CareCentrix.
- This is an opinion column. The thoughts expressed are those of the author.
- Visit the Business section of Insider for more stories.
We can afford to raise the minimum wage. As part of his administration’s bold COVID-19 relief package, President Joe Biden has promised to raise the federal minimum wage to $15 an hour. The trickle-down approach to recovery championed by the previous administration failed our country and only led to further economic hardships for hard working Americans. If successfully enacted, a $15 an hour federal minimum wage would benefit not just workers, but also businesses and the economy. Why am I so sure?
Because my company tried it. It worked.
Conservatives quickly pounced on Biden’s proposal, arguing that a minimum wage of $15 would hurt small businesses and result in massive job losses, but these assertions are just untrue. At our company, CareCentrix, we froze the wages of the top 20 executives to help raise our company’s minimum wage to $15 an hour seven years ago, and good things followed. Productivity increased and we cut employee turnover in half. With our frontline employees finally able to focus on their jobs and not worrying about their bills, profits rose and everyone in my company benefitted.
My business is thriving because we recognized that paying our hard working entry level employees wages that increasingly left them unable to afford basic living expenses was morally and economically absurd.
The moral case for raising the minimum wage is as clear as it is tragic. At CareCentrix, we learned that one of our teammates was living out of her car to save on bills, while another entry-level employee needed to raise money from her peers to afford diapers. The more I learned about the harsh reality my workforce was facing by trying to take care of their families and balance their expenses on the current minimum wage, the clearer it became that a change was overdue.
Take those stories, multiply them by millions, and you’ll see a clear picture of what failing to pay folks a livable wage has done, and will continue to do, to the social and economic fabric of our country if left unaddressed. The United States appears to be headed towards a K-shaped recovery from the economic crisis brought on by the pandemic, where wealthy executives like myself enjoy massive gains in wealth, while low-wage workers disproportionately lose their jobs and savings. When low-wage workers do find jobs, they’re often working for the federal minimum of $7.25 an hour, a rate that does not even cover the rent anywhere in the United States, let alone provide the dignified life that essential workers deserve.
Some critics argue that raising the minimum wage during a pandemic sharpens our existing economic problems. However, failing to pay fair wages was precisely the thing that put so many hard working Americans on a cliff’s edge in the first place, which the COVID-19 crisis then pushed them over. Raising it now will, quite literally, save lives. Studies done even before the pandemic demonstrate that raising the minimum wage by just $1 prevents thousands of suicides every year.
The moral case is compelling, but the economic case for raising the wage is just as clear. Raising the minimum wage is one of the best macroeconomic tools we have to jumpstart the economy at a time when we need it most.
Consumer spending accounts for a whopping 70% of the American economy’s growth every year. The low-wage crisis existed before COVID-19, but the pandemic has made it infinitely worse. We now see troubling declines in consumer spending. A simple solution to that problem is to put more money in people’s pockets, and raising the wage is the perfect way to do that. Not only will this ensure that over 40 million workers–a full quarter of the workforce and two-thirds of the working poor–have a little more money to spend, it would actually increase job growth for retail and small businesses.
Congress, and the public at large, shouldn’t buy into the critics’ false frame on the minimum wage. My company (among others), is working proof of the widespread benefits of raising the wage to $15 an hour. Our success can be replicated nationwide and goes to show that raising wages and business success are not competing interests. We can raise the minimum wage, lift workers up, and revive our economy in the process.
John Driscoll is the CEO of CareCentrix, a leading Post-Acute care company which has been voted a national top place to work by multiple organizations. John serves as Chairman of the Waystar Corporation. He also Chairs the Truman National Security Project and is a member of the Patriotic Millionaires.