Friday marked six years since the last time Congress raised the federal minimum wage, from $5.15 an hour in 2007 to $7.25 an hour in 2009.
Advocates for a living wage and congressional Democrats used the occasion to argue that six years is too long for the wage to be stuck at $7.25, which isn’t enough money to keep a single parent working full-time out of poverty. That wage is worth about 8 percent less than it was in 2009, due to inflation.
Some advocates and liberal policy analysts pushed for increasing the minimum wage to $12 an hour by 2020, which is in line with a proposal in Congress introduced by Sen. Patty Murray (D-WA) and Rep. Robert Scott (D-VA).
Others pushed for $15 an hour by 2020, in line with the demands of striking “Fight for 15” workers and with a new proposal introduced last week by Sen. Bernie Sanders (I-VT) and Rep. Keith Ellison (D-MN).
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“It is a national disgrace that millions of full-time workers are living in poverty and millions more are forced to work two or three jobs just to pay their bills,” Sanders told a crowd of striking federal contract workers on Wednesday, the same day the bill was introduced.
“We can’t survive on $7.25” is a common slogan in the “Fight for 15” movement. Buoyed by the voices of the women and people of color who disproportionately hold low-wage jobs, Fight for 15 has helped push numerous cities and states to raise their wages in the past several years.
The movement may have also helped congressional Democrats to push for ever-higher minimum wage targets, even as Republicans continue to block any attempt to raise the wage. If Republicans aren’t even willing to consider a modest raise to $10.10, why not push back with a strong argument for wages that families can actually live on?
Research from the Economic Policy Institute (EPI) finds that the economy can support raising the minimum wage to $12 an hour by 2020, and that doing so would raise pay for one-third of African-American and Hispanic workers and one in four working mothers. A report from the National Women’s Law Center found that states with higher minimum wages also have lower pay gaps between men and women.
“The lowest paid worker in 1968 was making 24 percent more than that same worker today, almost 50 years later,” David Cooper, senior economic analyst at EPI, told Rewire. “That’s particularly important for women and workers of color, because they tend to be more of these low-wage workers.”
EPI’s analysis has focused on Murray and Scott’s $12 proposal and hasn’t taken a closer look at the $15 one Sanders and Ellison just put forward, but Scott said that it’s worth considering.
“I think that it’s still an open question as to how long it would take for us to reasonably get to 15,” Scott said. If wages had kept pace with productivity for the last several decades, he said, we could have easily had a $15 minimum wage by now—but since that didn’t happen, it’s a bit more challenging.
A raise to $12 by 2020, Scott said, would help reduce inequality. One measure of this is the relationship between the minimum wage and the median wage, which gives economists a sense of how much the average worker makes in comparison to the lowest-paid workers. The lowest-paid workers made a little more than half of what the typical worker made in the 1960s, but now they only make about 38 percent.
That’s low by both historical and international standards.
Wage increases have marked big wins for labor groups and advocates, but even $15 minimum wages will have limited benefits when they’re fully implemented, especially for workers in big cities.
For example, New York’s possible $15 minimum wage, if approved, would be fully implemented by 2021 and worth $11.27 in the New York City area. Once Los Angeles’ minimum wage reaches $15 per hour in 2020, it will be roughly equivalent to $9.75 for the average American worker today, according to projections published by FiveThirtyEight.
Both the $12 and $15 proposals in Congress would index the minimum wage to the median wage going forward to help address that issue, and would also close a loophole that lets bosses pay tipped workers much less than the standard minimum wage.
Specific proposals aside, research suggests that raising the minimum wage doesn’t hurt job growth and that employers can afford to pay higher wages, given that corporate profits are at record highs while the share of revenues going to workers are at record lows.