POLICY CORNER: National Landscape on the Minimum Wage

Contributing Writer
Yanet Lathrop

These are exciting times for those of us working to increase the earnings of low-wage workers. Strong public support for higher wages, building on local and state initiatives and victories – and even a new federal bill – all point to the incredible momentum that the minimum wage is currently enjoying.

The last time Congress voted to increase the federal minimum wage was in 2007, when a Democratic-controlled Congress passed a measure increasing the nation’s wage floor from $5.15 to $7.25 per hour. Since then, no further action on the federal minimum wage has been taken, despite loud calls for raising the wage to restore its lost value.

Various states and some cities have moved on the lack of Congressional action by raising their minimum wages. In 2014, fourteen states and eleven cities passed legislation or approved ballot initiatives raising their local wage floors. Among them were Alaska, Arkansas, Nebraska and South Dakota, four solid red states where minimum wage ballot proposals passed with strong public support. And then there are Seattle, San Francisco and Chicago, three trailblazing cities with high rates of $13.00-$15.00 per hour. Currently, twenty-nine states plus the District of Columbia have minimum wage rates higher than the federal floor.

Local Minimum Wage Ordinances in the U.S.

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The general public overwhelmingly supports higher wages. According to a January poll by Hart Research Associates on behalf of the National Employment Law Project, 75% of Americans support increasing the federal minimum wage to $12.50 per hour, and 63% approve of raising it to $15.00 per hour. In addition, 81% support annual adjustments to account for the rising cost of living, and 71% favor gradually eliminating the sub-minimum wage that tipped workers – such as restaurant wait staff, manicurists and pizza delivery drivers – earn as base pay. The current federal tipped sub-minimum wage has been frozen at $2.13 per hour for over two decades. The Hart poll shows public support for these measures that cuts across party affiliation, geographical location, socioeconomic class and other demographic characteristics.

Despite the popularity of the minimum wage, action on the federal level has stalled due in part to partisan politics and the influence of lobbyists, such as those from the restaurant industry. Since 1989, the National Restaurant Association (NRA), the restaurant industry’s trade association, has poured $12.5 million into the campaigns of federal office-seekers, with the lion’s share going to Republicans. Millions more have been donated to political campaigns by some of its highest profile members, including McDonald’s, Wendy’s and Walt Disney. The NRA opposes increasing the minimum wage, particularly in the food and service industries, and relentlessly fights against legislation or ballot initiatives to improve pay for the country’s lowest-paid workers.

However, this has not deterred workers and advocates from launching minimum wage campaigns throughout the country to demand fair pay. Campaigns are currently ongoing in several states, including Washington, Oregon and California, and in various cities, including New York City, the District of Columbia and St. Louis. Several other campaigns are being explored, with launches expected in the next two years. In addition, workers in low-wage industries, such as fast food, retail and health care, have been organizing to highlight tenuous working conditions and poverty wages in these industries, and to demand pay of $15.00 per hour and the right to organize. And they are winning. Illustrative of this is the decision by industry giants, Facebook and Aetna, to raise their minimum wage to $15.00 and $16.00 per hour, respectively, and by Walmart and McDonald’s to voluntarily raise their pay above the federal minimum wage.

Taking a cue from these victories and campaigns, congressional democrats introduced a new minimum wage bill that calls for increasing the federal wage floor to $12.00 per hour by 2020, and indexing the new rate to the median wage. The new bill, introduced by Sen. Patty Murray (D-WA) and Rep. Robert C. Scott (D-VA) in April, also seeks to gradually eliminate the tipped sub-minimum wage so that all workers are paid one fair wage.

Summary of Research on Effects of Raising the Minimum Wage at Local Level

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If efforts to raise the federal minimum wage are successful, more than thirty-five million workers would benefit, the overwhelming majority of whom (89%) are adults. Nearly half (47%) are workers of color, 56% are women and 27% are parents raising 23% of the nation’s children. Single parents comprise nearly 3.9 million of those affected, and half of all affected workers have family incomes of less than $40,000 per year.

Two decades of rigorous research shows that raising the minimum wage boosts the income of low-paid workers without reducing overall employment. According to researchers, businesses are able to pay higher wages without reducing employment due to a range of factors, including reductions in employee turnover and increases in productivity – two effects of robust wages that can lower the direct and indirect costs of running a business.

To learn more and to take action on raising the minimum wage, visit: https://fairworldproject.org/campaigns/raising-the-minimum-wage/

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