Can’t Survive on $7.25: Ten Years Since Last Increase, Congress Still Won’t Raise the Minimum Wage

 

“We’re asking for a chance to live, go to school, and live safely. Fifteen isn’t just necessary, it’s the bare minimum. And we’re going to keep making noise, we’re going to keep on organizing, and we’re going to do what’s necessary to win.”—Ditanya Rosebud, Fight for $15 member, Baltimore, Maryland

Introduction and Key Findings

Early 2019 has brought strong gains in the fight for a higher minimum wage across the country, with four states adopting a path to $15, bringing the total to seven plus the District of Columbia. NELP estimates that the Fight for $15’s advocacy has helped put nearly one-third of the U.S. workforce on the path to $15 by 2025, when Illinois reaches $15. That’s a long way since 2012, when fast-food workers walked off their jobs to protest low pay. But absent decisive federal action, nearly 100 million workers will continue to struggle, especially in the 21 states where the minimum wage has remained frozen at $7.25 for the past 10 years. That’s less than half of $15—the largest gap in history between the federal wage and higher-wage states. Congress must act now to pass the Raise the Wage Act of 2019.

Key Findings

  • Seven states and D.C. are already on the path to a $15 minimum wage, with four having joined the group in 2019: New Jersey, Illinois, Maryland, and Connecticut
  • 1% of the U.S. workforce (45 million workers) will be covered by a $15 minimum wage by 2025 under current state law phase-ins
  • 21 states have been stuck at the $7.25 federal minimum wage for 10 years, many with preemption laws that prevent local governments from going higher
  • These 21 states are home to 56 million workers, while a total of nearly 100 million still live in states with minimum wages below $15
  • Since 2009, the real value of the federal minimum has eroded and is now worth $6.11 in today’s dollars
  • The Raise the Wage Act of 2019 would increase wages for 40 million workers by gradually phasing in $15 by 2024
  • The act would end the exploitative tipped and disability sub-minimum wages
  • Nearly 40 percent of all Black workers would receive increases under the federal law, compared to 23.2 percent of white workers
  • Out of the 10 states with the highest concentration of African Americans, eight are among the states frozen at $7.25
  • Polls show overwhelming support for raising the national minimum wage to $15

 

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Endnotes

[1].        Alastair Gair, “Earn minimum wage in the US? You can afford to live in exactly 12 counties,” The Guardian, June 8, 2017, https://www.theguardian.com/us-news/2017/jun/08/minimum-wage-affordable-housing-rentals-study.

[2].        See Appendix A of Richard C. Sutch, “The Unexpected Long-Run Impact of the Minimum Wage: An Educational Cascade,” NBER Working Paper No. w16355, September 2010, https://www.nber.org/appendix/w16355/Appendix%20A%20State%20Laws.pdf. See also U.S. Department of Labor, Wage and Hour Division, “History of Federal Minimum Wage Rates Under the Fair Labor Standards Act, 1938 – 2009,” https://www.dol.gov/whd/minwage/chart.htm.

[3].          Ben Zipperer, The erosion of the federal minimum wage has increased poverty, especially for black and Hispanic families, Economic Policy Institute, June 13, 2018, https://www.epi.org/publication/the-erosion-of-the-federal-minimum-wage-has-increased-poverty-especially-for-black-and-hispanic-families/.

[4].          Anna Bahney, “40% of Americans can’t cover a $400 emergency expensive,” CNN.com, May 22, 2018, https://money.cnn.com/2018/05/22/pf/emergency-expenses-household-finances/index.html.

[5].          Arindrajit Dube, T. William Lester and Michael Reich, “Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties,” Review of Economics and Statistics, Vol. 92, No. 4 (November 2010): 945–964, http://irle.berkeley.edu/files/2010/Minimum-Wage-Effects-Across-State-Borders.pdf.

[6].          Economic Policy Institute, “Worker rights preemption in the U.S.,” [interactive map], https://www.epi.org/preemption-map/.

[7].          John Blake, “Fight to raise minimum wage wins court victory in Birmingham,”CNN.com, July 26, 2018, https://www.cnn.com/2018/07/25/us/fight-for-15-birmingham-appeals-court-ruling/index.html.

[8].        U.S. Census Bureau, The Black Population: 2010, September 2011, https://www.census.gov/prod/cen2010/briefs/c2010br-
06.pdf
.

[9].        Kaiser Family Population, Population Distribution by Race/Ethnicity, http://bit.ly/2wBvYtb.

[10].     Laura Huizar and Tsedeye Gebreselassie, What a $15 Minimum Wage Means for Women and Workers of Color, December 2016,
https://www.nelp.org/wp-content/uploads/Policy-Brief-15-Minimum-Wage-Women-Workers-of-Color.pdf.

[11].        Economic Policy Institute, Why America Needs a $15 Minimum Wage, February 5, 2019, https://www.epi.org/publication/why-america-needs-a-15-minimum-wage/.

[12].        National Low Income Housing Coalition, Out of Reach, June 6 2018, https://nlihc.org/sites/default/files/oor/OOR_2018_Factsheet.pdf.

[13].        Craig K. Elwell, Inflation and the Real Minimum Wage: A Fact Sheet, Congressional Research Service, January 8, 2018, https://fas.org/sgp/crs/misc/R42973.pdf.

[14].        Bureau of Labor Statistics, CPI Inflation Calculator, https://data.bls.gov/cgi-bin/cpicalc.pl.

[15].     Economic Policy Institute, Why America Needs a $15 Minimum Wage, op. cit.

[16].        Kevin Kelleher, “Gilded Age 2.0: U.S. Income Inequality Increases to Pre-Great Depression Levels,” Fortune, February 13, 2019, http://fortune.com/2019/02/13/us-income-inequality-bad-great-depression/.

[17].        Kristin Meyers, “Corporations paid $91 billion less in taxes in 2018 under Trump’s tax law,” Yahoo! Finance, May 30, 2019, https://finance.yahoo.com/news/corporations-paid-91-billion-less-in-taxes-in-2018-under-trumps-tax-law-160745447.html.

[18].        Rachel West, “Here’s How Much America’s Rising Income Inequality Is Costing Social Security,” Center for American Progress, February 13, 2019, https://www.americanprogress.org/issues/poverty/news/2019/02/13/466134/heres-much-americas-rising-income-inequality-costing-social-security/.

[19].        Henry S. Farber, Daniel Herbst, Ilvana Kuziemko, and Suresh Naidu, “Unions and Inequality Over the Twentieth Century: New Evidence from Survey Data,” NBER Working Paper No. w24587, May 2018, http://tuvalu.santafe.edu/~snaidu/papers/union_sub3.pdf.

[20].        Robert Manduca, “How rising U.S. income inequality exacerbates racial economic disparities,” Washington Center for Equitable Growth, August 23, 2018, https://equitablegrowth.org/how-rising-u-s-income-inequality-exacerbates-racial-economic-disparities/.

[21].        Chris McGreal, “’You can’t win’: the parents working full-time – and struggling to survive,” The Guardian, April 30, 2019, https://www.theguardian.com/us-news/2019/apr/30/you-cant-win-the-parents-working-full-time-and-struggling-to-survive.

[22].      See Yannet Lathrop, Impact Of The Fight For $15: $68 Billion In Raises, 22 Million Workers, National Employment Law Project,
November 29, 2018, https://www.nelp.org/publication/impact-fight-for-15-2018/. Estimates as of November 2018, and does not include states, localities or employers who adopted higher wages after that date.

[23].        National Employment Law Project, Raises from Coast to Coast, December 27, 2018, https://www.nelp.org/publication/raises-coast-coast-2019/.

[24].        See American Hotel and Lodging Association et al to Senator Tom Harkin, March 31, 2014, http://images.politico.com/global/2014/04/01/113th_congress_minimum_wage_letter_for_trades_final.html. See also Tami Luhby, “The impact of a $9 minimum wage,” CNN.com, February 13, 2013, https://money.cnn.com/2013/02/12/news/economy/obama-minimum-wage/index.html; Claire ZIllman, “Congressional Democrats’ new minimum wage proposal: $12 per hour,” April 29, 2015, http://fortune.com/2015/04/29/minimum-wage-congress-12-dollars/.

[25].        Arindrajit Dube, T. William Lester and Michael Reich, op. cit.

[26].        See Lathrop, op. cit. See also Jeffry Bartash, “Unemployment rate falling near or at record lows for almost all groups of Americans,” MarketWatch, October 5, 2018, https://www.marketwatch.com/story/unemployment-rate-near-or-at-record-lows-for-almost-all-groups-of-americans-2018-10-05.

[27].        Chicagoland Chamber of Commerce, “2018 Chicagoland Small Business Outlook Survey Shows Rising Optimism About Chicago’s Economy” January 29, 2018, https://www.chicagolandchamber.org/News/TabId/112/ArtMID/674/ArticleID/7333/2018-CHICAGOLAND-SMALL-BUSINESS-OUTLOOK-SURVEY-SHOWS-RISING-OPTIMISM-ABOUT-CHICAGO%E2%80%99S-ECONOMY.aspx. See also John Carpenter, “Outside Opinion: $15 minimum wage would hurt mom-and-pop businesses,” June 22, 2014, https://www.chicagotribune.com/business/ct-minimum-wage-carpenter-0622-biz-20140622-story.html.

[28].        Lauren Weber, “One Reason Wal-Mart Is Raising Pay: Turnover,” The Wall Street Journal, Feb. 19, 2015, http://blogs.wsj.com/atwork/2015/02/19/one-reason-wal-mart-is-raising-pay-turnover/. See also Michael Reich et al., Institute of Industrial Relations, University of California, Berkeley, Living Wage Policies at San Francisco Airport: Impacts on Worker and Businesses (Nov. 2003), http://irle.berkeley.edu/files/2003/Living-Wage-Policies-at-San-Francisco-Airport.pdf; Amanda Gallear, UC Berkeley Labor Center, The Impact of Wages and Turnover on Security and Safety in Airports: A Review of the Literature (Oct. 18, 2017), http://laborcenter.berkeley.edu/the-impact-of-wages-and-turnover-on-security-and-safety-in-airports/. Justin Wolfers & Jan Zilinsky, PIIE Briefing 15-2, Higher Wages for Low-Income Workers Lead to Higher Productivity (2015) at 6, https://piie.com/publications/briefings/piieb15-2.pdf.

[29].        Jackie Crosby, “Costco joins Amazon with $15 minimum wage, putting pressure on Target and Best Buy,” March 8, 2019, http://www.startribune.com/costco-joins-amazon-with-15-minimum-wage-putting-pressure-on-target-and-best-buy/506899532/.

[30].        Emily Flitter, “Bank of America Will Lift Minimum Wage to $20, as Lawmakers Spotlight Inequality,” April 9, 2019, https://www.nytimes.com/2019/04/09/business/bank-of-america-minimum-wage.html.

[31].        H.R. 582, Raise the Wage Act, 116th Congress, https://www.congress.gov/bill/116th-congress/house-bill/582.

[32].      David Cooper, “Raising the federal minimum wage to $15 by 2024 would lift pay for nearly 40 million workers,” Economic
Policy Institute, February 5, 2019, https://www.epi.org/publication/raising-the-federal-minimum-wage-to-15-by-2024- would-lift-pay-for-nearly-40-million-workers/.

[33].      Robert C. Sutch, op. cit.

[34].      National Conference of State Legislatures, State Minimum Wages | 2019 Minimum Wage by State,
http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx

[35].        Alexia Fernández Campbell, “Voters just gave nearly 1 million workers a raise in 2 red states,” November 7, 2018, https://www.vox.com/2018/11/7/18071804/minimum-wage-arkansas-missouri-election-ballot-measure.

[36].        National Employment Law Project et al, “The Federal Minimum Wage Should Be A Robust National Wage Floor, Not Adjusted Region By Region,” March 19, 2019, https://www.nelp.org/publication/federal-minimum-wage-robust-national-wage-floor-not-adjusted-region-region/.

[37].        U.S. Department of Labor, Wage and Hour Division, Minimum Wages for Tipped Employees, https://www.dol.gov/whd/state/tipped.htm.

[38].        Elise Gould and David Cooper, “Seven facts about tipped workers and the tipped minimum wage,” Economic Policy Institute, May 31, 2018, https://www.epi.org/blog/seven-facts-about-tipped-workers-and-the-tipped-minimum-wage/.

[39].     Alexia Fernández Campbell, ”A loophole in federal law allows companies to pay disabled workers $1 an hour,” Vox, May 3,
2018, https://www.vox.com/2018/5/3/17307098/workers-disabilities-minimum-wage-waiver-rock-river-valley-self-help.

[40].    See Cory Herro, “Maryland to Become the Second State to Guarantee Fair Minimum Wage for Workers with Disabilities,”
ThinkProgress, April 20, 2016, https://thinkprogress.org/maryland-to-become-the-second-state-to-guarantee-fair-minimum-wage-for-workers-with-disabilities-a5e44cbda84f/. See also Alaska Department of Labor & Workforce Development,
“Minimum wage exemption for persons with disabilities eliminated,” [press release], February 16, 2018,
http://labor.alaska.gov/news/2018/news18-04.pdf.

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