And let’s not forget the macroeconomic factors.
In general terms, wealthy people spend some of their money, then hoard the rest. In contrast, poor people spend all of their money, because they have none to spare.
Money in motion is the economic engine; consumption drives productive growth. When you raise wages, ordinary consumers have more to spend. This in turn drives sales, which in turn drives production, which in turn drives employment.
The basic consequence of this is that a dollar in the pocket of a poor person has more economic value than a dollar in the vault of a rich person. To create real economic growth, raise wages.
