Minimum Wage Boost Could Create 100,000 Jobs

Credit: Joe Kekeris
Credit: Joe Kekeris

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When wages rise, workers and communities benefit. So imagine how improved our national economy would be if the wages of nearly 30 million workers got a boost?

If Congress acted to raise the federal minimum wage to $9.80 by July 1, 2014, some 28 million workers would see a pay increase, according to the Economic Policy Institute’s (EPI) latest report on the minimum wage. Further, those workers would receive nearly $40 billion in additional wages over the phase-in period.

During an across the board phase-in period of the minimum-wage increase, the U.S. gross domestic product (GDP) would increase by roughly $25 billion, resulting in the creation of approximately 100,000 net new jobs, according to EPI (click on chart at left to expand).

Maybe that’s because raising the minimum wage is a matter of fairness and basic American values: The minimum wage would be $10.55 an hour if it matched the inflation rate. Now it’s $7.25 an hour.

Maybe that’s because raising the minimum wage is a matter of fairness and basic American values: Now at $7.25 an hour, the minimum wage would be $10.55 an hour if it matched the inflation rate.

The newest EPI report reiterates some of its earlier findings, which refute the stereotypes often associated with minimum-wage workers.

  • Women would comprise nearly 55 percent of those who would benefit.
  • Nearly 88 percent of workers who would benefit are at least 20 years old.
  • Although workers of all races and ethnicities would benefit from the increase, non-Hispanic white workers comprise the largest share (about 56 percent) of those who would be affected. About 42 percent of affected workers have at least some college education.
  • Around 54 percent of affected workers work full time, over 70 percent are in families with incomes of less than $60,000, more than a quarter are parents and over a third are married.
  • The average affected worker earns about half of his or her family’s total income.

On July 26, Sen. Tom Harkin introduced a stand-alone minimum-wage bill, S. 3453, The Fair Minimum Wage Act of 2012. On the same day,
Rep. George Miller (D-Calif.) introduced legislation in the House of Representatives, H.R. 6211, mirroring Harkin’s minimum-wage legislation.

Congress is home for summer vacation right now, but lawmakers will be back. And when they return, the AFL-CIO urges them to pass the Fair Minimum Wage Act of 2012 (read letter here), as are noted economists.

This blog originally appeared in AFL-CIO on August 15, 2012. Reprinted with permission.

About the Author: Tula Connell got her first union card while she worked her way through college as a banquet bartender for the Pfister Hotel in Milwaukee they were represented by a hotel and restaurant local union (the names of the national unions were different then than they are now). With a background in journalism (covering bull roping in Texas and school boards in Virginia) she started working in the labor movement in 1991. Beginning as a writer for SEIU (and OPEIU member), she now blogs under the title of AFL-CIO managing editor.

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Madeline Messa

Madeline Messa is a 3L at Syracuse University College of Law. She graduated from Penn State with a degree in journalism. With her legal research and writing for Workplace Fairness, she strives to equip people with the information they need to be their own best advocate.