Minimum wage has been a contentious issue in the U.S. as the presidential election heats up. However, the extra income could go a long way in consumer sectors and related exchange traded funds.
U.S. businessman Donald Trump, the leading Republican presidential candidate, said that he would not back a higher minimum wage for American workers, Reuters reported.
“Having a low minimum wage is not a bad thing for this country,” Trump said. “We can’t have a situation where our labor is so much more expensive than other countries’ that we can no longer win.”
Meanwhile, a growing segment of America is calling for higher minimum wages across the government after years of stalled efforts. The national minimum wage has been set at $7.25 per hour since 2009, and changes would require the sport of the Republican-controlled Congress.
A number of research has pointed to improved economic conditions from higher wages. For instance, in a 2011 study by the Chicago Federal Reserve, the author found that for ever dollar increase in minimum wage, a worker’s household added $2,800 in new consumer spending over the following year.
When the federal minimum wage was first introduced in 1938, the government’s goal was to maintain a wage floor to keep Americans out of poverty and stimulate the economy through spending.