Back to Top

SUPPORT FOR INCREASING THE MINIMUM WAGE

The federal minimum wage was introduced in 1938 during the Great Depression under President Franklin Delano Roosevelt. It was initially set at $0.25 per hour and has been increased by Congress 22 times, most recently in 2009 when it went from $6.55 to $7.25 an hour. 29 states plus the District of Columbia (DC) have a minimum wage higher than the federal minimum wage. 2,561,000 workers (or 3.3% of the hourly paid working population) earn the federal minimum wage or below.
According to the US Department of Labor, 2,561,000 workers, or 3.3% of the hourly paid working population aged 16 and over earned at or below the federal minimum wage of $7.25 an hour in 2015. Workers earning below the federal minimum wage include full-time students who can be paid no less than 85% of the federal minimum wage, workers with disabilities who can be paid a wage commensurate with their productivity, new hires under the age of 20 who may be paid $4.25 an hour for the first 90 calendar days of employment, and tipped workers who may be paid less than the federal minimum wage but whose cash tips must make up their take home pay to equal at least the minimum wage.
US Department of Labor statistics show that in 2015 55% of workers employed at or below the federal minimum wage are over 25 years old. 63% are women and 58% are working part time. 73% of minimum wage workers are white, 19% are African American, 18% are Hispanic or Latino, and 4% are Asian. 50% work in food preparation and serving related occupations.
According to the Pew Research Center, 55% of minimum wage workers are employed in the leisure and hospitality industry, 14% in retail, and 8% in education and health services.
In Mar. 2016, 45 states plus DC had their own minimum wage laws in place. 29 of these states plus DC had minimum wages higher than that of the federal minimum wage of $7.25 an hour - the highest being DC at $10.50 an hour. When a state minimum wage is set at a higher rate than the federal minimum wage, the highest rate prevails. 14 states set their minimum wage in line with the federal minimum wage; and two states – Georgia and Wyoming – set their rates lower at $5.15 an hour. However, Georgia and Wyoming must pay the federal minimum wage to those employed in positions covered by the FLSA. Only workers employed in positions not covered by the FLSA, such as outside salespersons and certain domestic service workers providing companionship services, may be paid $5.15 an hour. Five states – Alabama, Louisiana, Mississippi, South Carolina, and Tennessee – do not have minimum wage legislation on their statute books and as such are required to pay workers covered by the FLSA a minimum of $7.25 an hour.
In addition to state minimum wages, there are at least 30 cities and counties that have adopted legislation enforcing a higher minimum wage than their respective state levels. As of Jan. 2016, the highest of these is $14.44 an hour in Emeryville, CA. When a city or county minimum wage is set higher than its respective state and the federal minimum wage, the highest rate prevails. Many states have laws prohibiting cities and counties from setting their own minimum wage levels.
Since the Fair Minimum Wage Act of 2007 raised the federal minimum wage to $7.25 an hour starting in 2009, there have been numerous unsuccessful attempts by Congress to raise the wage further. The two main efforts are the Harkin-Miller proposal to raise the wage to $10.10 and the Living Wage Movement to raise the wage to $15.
US Senator Tom Harkin (D-IA) and US Representative George Miller (D-CA) introduced legislation in 2012, 2013, and 2014 to raise the minimum wage, but none of those efforts passed. When their proposal to raise the minimum wage to $10.10 was re-introduced for a third time in 2014 under the Minimum Wage Fairness Act, it was supported by President Obama. However, their bill failed by four votes to overcome a Republican-led filibuster in the Senate on Apr. 30, 2014.
The US Living Wage Movement was established in the 1990s. They campaign for wages that are at a level where people who work full time earn enough to support themselves and their families without the need to rely on public welfare or assistance programs. In the 114th Congress (2015-2016) US Senator Bernie Sanders (I-VT) introduced living wage legislation in the Senate, and US Representative Donald Norcross (D-NJ) introduced similar legislation in the House.
Supporters of the living wage include Governors Andrew Cuomo of New York and Jerry Brown of California, the New York Times Editorial Board, and former US Secretary of Labor, Robert Reich. Opponents of the living wage include President Donald Trump, Senator Marco Rubio (R-FL), and the US Chamber of Commerce.

Increasing the minimum wage would reduce poverty. 

A person working full time at the federal minimum wage of $7.25 per hour earns $15,080 in a year, which is 20% higher than the 2015 federal poverty level of $12,331 for a one-person household under 65 years of age but 8% below the 2015 federal poverty level of $16,337 for a single-parent family with a child under 18 years of age.1,2 According to a 2014 Congressional Budget Office report, increasing the minimum wage to $9 would lift 300,000 people out of poverty, and an increase to $10.10 would lift 900,000 people out of poverty.3 A 2013 study by University of Massachusetts at Amherst economist Arindrajit Dube, PhD, estimated that increasing the minimum wage to $10.10 is “projected to reduce the number of non-elderly living in poverty by around 4.6 million, or by 6.8 million when longer term effects are accounted for.”4 
1. US Department of Labor, “History of Federal Minimum Wage Rates under the Fair Labor Standards Act, 1938-2009,” dol.gov  2. US Census Bureau, “Poverty Thresholds by Size of Family and Number of Children,” census.gov 3. Congressional Budget Office, “The Effects of Minimum-Wage Increase on Employment and Family Income,” cbo.gov, Feb. 2014 4. Hristos Doucouliagos and T.D. Stanley, “Publication Selection Bias in Minimum-Wage Research? A Meta-Regression Analysis,”British Journal of Industrial Relations, June 2009  

A higher minimum wage would reduce government welfare spending. 

If low-income workers earned more money, their dependence on, and eligibility for, government benefits would decrease. The Center for American Progress reported in 2014 that raising the federal minimum wage by 6% to $10.10 would reduce spending on the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) by 6% or $4.6 billion.1 The Economic Policy Institute determined that by increasing the minimum wage to $10.10, more than 1.7 million Americans would no longer be dependent on government assistance programs. They report the increase would shave $7.6 billion off annual government spending on income-support programs.2 
1. Rachel West and Michael Reich, “The Effects of Minimum Wages on SNAP Enrollments and Expenditures,” Center for American Progress website, Mar. 2014  2. David Cooper, “Raising the Federal Minimum Wage to $10.10 Would Save Safety Net Programs Billions and Help Ensure Businesses Are Doing Their Fair Share,” Economic Policy Institute website, Oct. 16, 2014 

The minimum wage has not kept up with inflation. 

Because the federal minimum wage is not indexed for inflation, its purchasing power (the number of goods that can be bought with a unit of currency) has dropped considerably since its peak in 1968. The minimum wage in 1968 was $1.60, which is equivalent to $11.16 in Jan. 2016 dollars and which is 53.9% higher than today’s $7.25 federal minimum wage.1,2 Between July 2015 and the last increase in the minimum wage in 2009, the federal minimum wage lost 8.1% of its purchasing power to inflation.3, 4 According to Liana Fox, PhD, Senior Analyst at the Economic Policy Institute, “inflation indexing guarantees low-wage workers a wage that keeps pace with the rising costs of goods and services.”5 Raising the minimum wage and indexing it to inflation would ensure that low-wage workers could adopt a standard of living commensurate with the current economy.6, 7, 8
1. US Department of Labor, “History of Federal Minimum Wage Rates under the Fair Labor Standards Act, 1938-2009,” dol.gov  2. Saving.org, “Inflation Calculator,” saving.org 3. US Department of Labor, “History of Federal Minimum Wage Rates under the Fair Labor Standards Act, 1938-2009,” dol.gov  4. Drew DeSilver, “Five Facts about the Minimum Wage,” Pew Research Center website, July 23, 2015 5. Liana Fox, “Indexing the Minimum Wage for Inflation,” Economic Policy Institute website, Dec. 20, 2005 6. Salvaotre Babones, “The Minimum Wage Is Stuck at $7.25; It Should Be $21.16 - or Higher,” Inequality.org, July 24, 2012 7. National Economic Council, Council of Economic Advisors, Domestic Policy Council and the US Department of Labor, “The Impact of Raising the Minimum Wage on Women; And the Importance of Ensuring a Robust Tipped Minimum Wage,” whitehouse.gov, Mar. 2014  8. Caitlin Biegler, “Why the Minimum Wage Should Be Indexed to Inflation,” MinnPost, Mar. 10, 2014 

Improvements in productivity and economic growth have outpaced increases in the minimum wage. 

While the estimates of how much the minimum wage should be increased vary, many economists agree that if it had kept pace with rising productivity and incomes, it would be higher than the current $7.25 an hour. According to a study by the Center for Economic and Policy Research (CEPR), the federal minimum wage would have been $21.72 per hour in 2012, instead of $7.25, if the minimum wage had kept pace with increases in productivity since 1968.1 The Institute for Policy Studies estimated in 2012 that personal income has grown by 100.6% since 1968, while the minimum wage has stagnated: “If our standard for minimum wages had kept pace with overall income growth in the American economy, it would now be $21.16 per hour.”2 The Economiststated in 2015 that “America as a whole is an outlier among advanced economies... one would expect America, where GDP per person is $53,000, to pay a minimum wage around $12 an hour. That would mean a raise of about 65% for Americans earning the minimum pay rate.”3 
1. John Schmitt, “The Minimum Wage Is Too Damn Low,” Center for Economic and Policy Research website, Mar. 2012  2. Salvaotre Babones, “The Minimum Wage Is Stuck at $7.25; It Should Be $21.16 - or Higher,” Inequality.org, July 24, 2012  3. The Economist, “Pay Dirt,” economist.com, May 20, 2015  

Increasing the minimum wage would reduce income inequality. 

Among the 34 Organisation for Economic Cooperation and Development (OECD) member countries, the United States has one of the highest levels of income inequality, with only Chile, Mexico, and Turkey having higher levels of income inequality.1 In 2012 the richest 1% of the US population earned 22.83% of the nation’s total pre-tax income resulting in the widest gap between the rich and the poor since the 1920s.2 A 2015 study found that the decrease in the inflation-adjusted value of the minimum wage since the 1980s has been a contributor to America’s high levels of inequality.3 Isabel Sawhill, PhD, Senior Fellow in Economic Studies at the Brookings Institution, stated in 2014 that raising the minimum wage would reduce income inequality, and Jason Furman, PhD, Chairman of President Obama’s Council of Economic Advisers, stated in 2014 that the weakening value of the minimum wage “is one of the important [reasons]... for inequality at the bottom.”4 
1. Organisation for Economic Cooperation and Development, “OECD Income Distribution Database (IDD): Gini, Poverty, Income, Methods and Concepts,” oecd.org 2. Bernie Sanders, “Income Wealth and Inequality,” berniesanders.com 3. David Autor, Alan Manning, and Christopher L. Smith, “The Contribution of the Minimum Wage to U.S. Wage Inequality over Three Decades: A Reassessment,” economics.mit.edu, Feb. 2015 4. Jeanne Sahadi, “Will a Higher Minimum Wage Really Reduce Income Inequality?,” money.cnn.com, Jan. 15, 2014  

A minimum wage increase would help to reduce race and gender inequality. 

Despite representing 47% of US workers, women make up 63% of minimum wage workers.1, 2 African Americans represent 12% of the US workforce, and make up 17.7% of minimum wage earners.3, 4 16% of the labor force is Hispanic, and they represent 21.5% of workers making the minimum wage.5, 6 In a time when the median income for women is 78% of the national median income, and African Americans and Hispanics make 67% and 79% of the median income respectively, increasing the minimum wage is necessary to create a more equitable income distribution for disadvantaged groups.7
1. David Cooper and Douglas Hall, “Raising the Federal Minimum Wage to $10.10 Would Give Working Families, and the Overall Economy, a Much-Needed Boost,” Economic Policy Institute website, Mar. 13, 2013 2. US Department of Labor, “Employed Wage and Salary Workers Paid Hourly Rates, Total at or below Prevailing Federal Minimum Wage, Women,” beta.bls.gov, Mar. 16, 2016 3. US Bureau of Labor Statistics, “Labor Force Characteristics by Race and Ethnicity, 2013,” bls.gov, Aug. 2014 4. US Bureau of Labor Statistics, “Characteristics of Minimum Wage Workers: 2012,” bls.gov, Feb. 23, 2016 5. US Bureau of Labor Statistics, “Labor Force Characteristics by Race and Ethnicity, 2013,” bls.gov, Aug. 2014 6. US Bureau of Labor Statistics, “Characteristics of Minimum Wage Workers: 2012,” bls.gov, Feb. 23, 2016 7. Bourree Lam, “Black, White, Asian, Hispanic: The Disparities in Household Income,” The Atlantic, Sep. 16, 2014 

Increasing the minimum wage would have a ripple effect, raising the incomes of people who make slightly above the minimum wage. 

Melissa S. Kearney, PhD, and Benjamin Harris, PhD, of the Brookings Institution found that increasing the minimum wage would result in higher wages not only for the 3.7 million people earning minimum wage, but also for up to 35 million workers who make up to 150% of the federal minimum wage.1 Researchers at the White House Council of Economic Advisors (CEA) found that an increase to $10.10 an hour would raise wages for 28 million Americans–about nine million of those due to the ripple effect.2
1. Melissa S. Kearney and Benjamin H. Harris, “The ‘Ripple Effect’ of a Minimum Wage Increase on American Workers,” The Hamilton Project website, Jan. 10, 2014 2. Council of Economic Advisors, “The Economic Case for Raising the Minimum Wage,” whitehouse.gov, Feb. 12, 2014 


Increasing the minimum wage would increase worker productivity and reduce employee turnover. 

Increases in wages are associated with increased productivity, according to many economists, including Janet Yellen, PhD, Chair of the Federal Reserve.1 Alan Manning, DPhil, Professor of Economics at the London School of Economics, stated in 2014: “As the minimum wage rises and work becomes more attractive, labor turnover rates and absenteeism tend to decline.” A 2014 University of California at Berkeley study found “striking evidence that... turnover rates for teens and restaurant workers fall substantially following a minimum wage increase,” declining by about 2% for a 10% increase in the minimum wage. A 2014 survey found that 53% of small business owners believed that “with a higher minimum wage, businesses would benefit from lower employee turnover and increased productivity and customer satisfaction.”
1. Janet L. Yellen, “Efficiency Wage Models of Unemployment,” Information and Macroeconomics, May 1984 2. Alan Manning, “Why Increasing the Minimum Wage Does Not Necessarily Reduce Employment,” Social Europe, Jan. 27, 2014 3. Arindrajit Dube, T. William Lester, and Michael Reich, “Minimum Wage Shocks, Employment Flows and Labor Market Frictions,” irle.berkeley.edu, Oct. 2014 4. American Sustainable Business Council and Business for a Fair Minimum Wage, “Small Business Owners Favor Raising Federal Minimum Wage,” asbcouncil.org, July 2014 

The current minimum wage is not high enough to allow people to afford housing.

According to a 2015 report from the National Low Income Housing Coalition, a worker must earn at least $15.50 an hour (over twice the federal minimum wage) to be able to afford to rent a “modest” one-bedroom apartment, and $19.35 for a two-bedroom unit (more than 2.5 times the minimum wage). The report stated: “In no state can an individual working a typical 40-hour work week at the federal minimum wage afford a one- or two-bedroom apartment for his or her family.” In California in 2015, even a person earning the then state minimum wage of $9 per hour would need to work 92 hours a week to afford to rent a one-bedroom apartment. In Rawlins County, Kansas, where rental costs are some of the most affordable in the country, a living wage including housing costs for one person with no dependents is estimated by the Massachusetts Institute of Technology to be $9.35, 25.3% higher than the federal minimum wage and the state minimum wage of Kansas.
1. Ana Swanson, “What You’d Need to Earn in Every State to Rent a Decent Apartment,” Washington Post, June 9, 2015 2. Massachusetts Institute of Technology, “Living Wage Calculator for Rawlins County, Kansas,” livingwage.mit.edu

The current minimum wage is not high enough to allow people to afford everyday essentials. 

According to a 2013 poll by Oxfam America, 66% of US workers earning less than $10 an hour report that they “just meet” or “don’t even have enough to meet” their basic living expenses, and 50% say that they are frequently worried about affording basic necessities such as food. A 2015 report by the Alliance for a Just Society, found that “the federal minimum wage of $7.25 per hour represents less than half of a living wage for a single adult” and a worker supporting only himself would have to work 93 hours a week at the federal minimum wage in order to make ends meet “or skip necessities like meals or medicine.”
1. Oxfam America, “Hard Work, Hard Lives: Survey Exposes Harsh Reality Faced by Low-Wage Workers in the US,” oxfamamerica.org, 2013 2. Allyson Fredericksen, “Pay Up! Long Hours and Low Pay Leave Workers at a Loss,” Alliance for a Just Society website, Oct. 2015 

Raising the minimum wage would lead to a healthier population and prevent premature deaths. 

A 2014 Human Impact Partners study by Rajiv Bhatia, MD, found that raising the Californian minimum wage to $13 an hour by 2017 would “significantly benefit health and well-being.”1 The study found that those earning a higher minimum wage would have enough to eat, be more likely to exercise, less likely to smoke, suffer from fewer emotional and psychological problems, and even prevent 389 premature deaths a year.1 A 2014 study by the Bay Area Regional Health Inequities Initiative (BARHII) found that minimum wage workers are more likely to report poor health, suffer from chronic diseases, and be unable to afford balanced meals.2 The study concluded that “policies that reduce poverty and raise the wages of low-income people can be expected to significantly improve overall health and reduce health inequities.”2 Edward Ehlinger, MD, State Health Commissioner for Minnesota, stated that raising the Minnesotan minimum wage from $6.15 an hour to $9.50 by mid-2016 was probably “the biggest public health achievement... in the four years I’ve been health commissioner... If you look at the conditions that impact health, income is right at the top of the list... Anything we can do to help enhance economic stability will have a huge public health benefit. This is a major public health issue.”3
1. Rajiv Bhatia, “Health Impacts of Raising California’s Minimum Wage,” Human Impact Partners website, May 2014 2. Bay Area Regional Health Inequities Initiative (BARHII) “The Minimum Wage and Health: A Bay Area Analysis,” barhii.org, Oct. 2014 3. Kim Krisberg, “Raising Minimum Wage Good for Public Health, Not Just Wallets: Advocates Call for Federal Increase,” The Nation’s Health, Mar. 2015 

Raising the minimum wage would increase school attendance and decrease high school drop-out rates. 

A 2014 study found that raising the Californian minimum wage to $13 an hour would increase the incomes of 7.5 million families, meaning fewer would live in poverty. Teens who live in poverty are twice as likely to miss three or more days of school per month compared to those who do not; thus raising the minimum wage and lifting families out of poverty would mean children would miss fewer school days. The study found that “recent experimental studies show that increasing income can improve school performance.”1 Increasing the minimum wage would allow teens to work fewer hours for the same amount of pay giving them more time to study and reducing the likelihood that they would drop out of high school. A 2014 study by Alex Smith, PhD, Assistant Professor of Economics at the United States Military Academy at West Point, found that “an increase in the minimum wage from $7.25 to $10.10 (39%)... would lead to a 2-4 percentage point decrease in the likelihood that a low-SES [socio-economic status] teen will drop out.”2
1. Rajiv Bhatia, “Health Impacts of Raising California’s Minimum Wage,” Human Impact Partners website, May 2014 2. Alex Smith “Working Paper: The Minimum Wage and Schooling Decisions of Teenagers,” curry.virginia.edu, Sep. 2014 

Raising the minimum wage would help reduce the federal deficit. 

According to Aaron Pacitti, PhD, Associate Professor of Economics at Siena College, raising the minimum wage would help reduce the federal budget deficit “by lowering spending on public assistance programs and increasing tax revenue. Since firms are allowed to pay poverty-level wages to 3.6 million people -- 5 percent of the workforce -- these workers must rely on Federal income support programs. This means that taxpayers have been subsidizing businesses, whose profits have risen to record levels over the past 30 years.”1 According to James K. Galbraith, PhD, Professor of Government at the University of Texas in Austin, “[b]ecause payroll- and income-tax revenues would rise [as a result of an increase in the minimum wage], the federal deficit would come down.”2
1. Aaron Pacitti, “Raising the Minimum Wage Boosts Growth and Does Not Cause Unemployment,” Huffington Post, June 27, 2015 2. James Galbraith, “How to Save the Global Economy: Raise the Minimum Wage. A Lot.,” Foreign Policy, Jan. 3, 2012 

Raising the minimum wage would reduce crime. 

According to an Apr. 2016 study by the Executive Office of the President’s Council of Economic Advisors, “higher wages for low-income individuals reduce crime by providing viable and sustainable employment… raising the minimum wage to $12 by 2020 would result in a 3 to 5 percent crime decrease (250,000 to 540,000 crimes) and a societal benefit of $8 to $17 billion dollars.”1 A 2013 study found that living wage ordinances “lead to modest reductions in expected robbery, burglary, larceny, and MVT [motor vehicle theft] rates.”2 Researchers who studied crime rates and the minimum wage in New York City over a 25-year period found that “[i]ncreases in the real minimum wage are found to significantly reduce robberies and murders… a 10 percent increase in the real minimum wage results in a 6.3 to 6.9 percent decrease in murders” and a 3.4 to 3.7 percent decrease in robberies.3
1. Jose Fernandez, Thomas Holman, and John V. Pepper, “The Impact of Living Wage Ordinances on Urban Crime,” people.virginia.edu, July 5, 2013 2. Hope Corman and Naci Moran, “Carrots, Sticks, and Broken Windows,” nber.org. July 2002 3. Andrew Beauchamp and Stacey Chan, “The Minimum Wage and Crime,” bc.edu, November 18th, 2013



Powered by CampaignPartner.com - Political Websites