Raise The Minimum Wage

The floor is falling out from under workers, and it is long past time for Congress to rebuild the floor. The Fair Minimum Wage Act would increase the federal minimum wage to $10.10 an hour, raise the tipped minimum wage and index both to inflation.

Raise The Minimum Wage

Summary

The floor is falling out from under workers. The minimum wage is not enough for a full-time worker to lift a family of three out of poverty. The minimum wage for tipped workers – a miserly $2.13 an hour – hasn’t been raised in two decades.

Legislation – the Fair Minimum Wage Act – has been introduced in the House and Senate to increase the federal minimum wage from $7.25 to $10.10 an hour and index it to inflation. The legislation would also raise the tipped minimum wage to 70 percent of the federal minimum. It is long past time for Congress to rebuild the floor under workers.

Our Position

Americans need good jobs with good benefits. Workers should be paid fairly for the work that they do. But these days, workers aren’t sharing in the rewards of growing profits and productivity. Corporate profits are at new highs as a share of economy; wages at record lows. CEO salaries have soared while wages have stagnated. Part of the reason is that the floor is falling out from under workers. The current minimum wage has been losing value, and is not sufficient for a full-time worker to lift a family of three out of poverty. That is not right.

If the minimum wage had kept pace with inflation since 1960s, it would be more than $10.50 an hour today. If it had kept pace with the rise of worker productivity, it would have reached over $21.00 an hour. Instead profits are up, productivity is up, but workers are losing ground.

The fall in the floor is unfair and it hurts the economy. Consumer demand drives our economy. If workers aren’t paid fairly, they can’t afford to buy. Demand flags, the economy sags.

In the two years coming out of the financial collapse, the top 1 percent of Americans have captured over 110 percent of the income growth, while 99 percent lost ground on average. Thirty million American workers would benefit from increasing the minimum wage to $10.10. It is time to raise the floor.

Message

America’s middle class was built by workers earning a fair day’s pay for a fair day’s work. The minimum wage puts a floor under workers. But the minimum wage has lost ground over the last half-century. Now a full-time minimum wage worker can’t lift a family of three out of poverty. That is not right.

When workers don’t get paid fairly, they can’t buy. When they can’t buy, the economy can’t grow. Today, corporate profits are at a record high as a portion of the economy and workers wages at a record low. It is time to raise the floor.

Americans overwhelmingly support this. Many smart employers agree. But the business lobby spends big bucks to oppose it. Money talks with a loud voice in Washington. Congress will act only when voters demand action.

Crossfire

They Say: Raising the minimum wage will hurt the very workers you say you want to help. When you raise the price of employment, guess what happens? You get less of it.

You Say: That’s cute but not true. Workers and families get hurt if they can’t earn a fair day’s pay. In the real world, paying workers fairly puts more money in their pockets. They buy more; the economy grows. Employers start hiring. Lots of states have higher minimum wages than the federal minimum – and they haven’t paid a price in lost jobs.

They Say: Raising the minimum wage will hurt small businesses and force increases in prices.

You Say: Think Walmart and McDonald’s, not mom-and-pop stores. Two-thirds of businesses employing minimum wage workers have more than 100 employees. They force wages down so CEOs can clean up. When the minimum wage goes up, all businesses have to pay it – so no one is at a disadvantage. Modest increases in the minimum will have little effect on the total corporate costs or prices.

They Say: Most minimum wage workers are kids, working in the summer or part-time while going to school.

You Say: In reality, more than four-fifths of minimum wage workers are over 20 and most of those are long-term employees who rely on their job to support themselves and families. And with the costs of college or training going up, students can use a raise, too.

They Say: African Americans, Hispanics, teenagers and other low-income workers will lose out when the minimum wage goes up.

You Say: The young, African Americans and people earning under $20,000 per year (the groups most affected by the minimum wage) overwhelmingly support raising the minimum wage. They know it would help, not hurt.

Hot Facts

Roughly two out of three people working minimum wage jobs are women. (National Women’s Law Center/National Employment Law Project).

There are no states in which a federal minimum wage worker can afford fair market housing while working a standard 40-hour week. (National Low-Income Housing Coalition)

Adjusted for inflation, the 1968 minimum wage would be worth $10.59 today. (National Employment Law Project)

30 million workers would benefit from an increase in the minimum wage (National Employment Law Project).

Public Pulse

From six to seven out of 10 Americans, depending on the poll, support raising the federal minimum wage. (NBC News/Wall Street Journal, Gallup, Pew Research Center)

73% support raising the federal minimum wage to $10 per hour (Lake Research).

56% believe that increasing the minimum wage would help the economy (Lake Research).