The Minimum Wage Should we raise it?

Facts About the Minimum Wage The Minimum wage was first established in 1938 at $.25/hr The nationally mandated minimum wage is $5.15/hr, but states have the option of choosing a state/cities minimum (San Francisco has a minimum wage of $8.50) In 2002, 72 million US workers were paid on an hourly basis (60% of all workers) 2.2 Million reported hourly wages at or below $5.15/hr (3% of all workers)

Minimum Wage Workers Minimum wage earners tend to be young. –50% are under 25 –25% are between 16 and 19 Women are more likely to be on minimum wage –4% of women –2% of men Part time workers are 4 times more likely to be on minimum wage (8% vs. 2%) Most minimum wage workers have less than a high school diploma –2% of nigh school graduates –<1% of College Graduates 63% have never been married (22% are married)

Minimum Wage Workers By occupation, the largest proportion come from service industries (roughly 2/3 of all minimum wage workers – mostly food service) By industry group, 3/5 of minimum wage earners are in retail trade By geographic region, the South had the highest proportion (4%). The West has the lowest (2%) The proportion of minimum wage workers has trended down since 1979 (in 1979, 13% of the population was at or below minimum wage)

Inflation Adjusted Minimum Wage

Should we raise the Minimum Wage to $7.00? Congress has not increased the minimum wage in sever years – the longest stretch since A minimum wage increase would effect roughly 7.4 million Americans (5.4% of the workforce) – this includes roughly 600,000 single parents Due to recent welfare reform, more poor families are working –a minimum wage increase can have a larger impact on reducing poverty (an increase to $7 could lift 1 Million families out of poverty

Does the Minimum Wage Cause Job Loss? Studies suggest that at the aggregate level, any job loss due to minimum wage is negligible. –One notable exception is teenage employment. A 10% increase in the wage rate lowers employment by roughly 3% –Employers have several methods of absorbing minimum wage costs (lower benefits, higher prices, etc)

What About the EITC The Earned Income Tax credit is essentially a government subsidy for low wage workers A minimum wage increase to $7.00 along with EITC would raise a minimum wage family of three to an annual income of $17,700 (above the poverty line of $15,317)