Fair Minimum Wage Act increases minimum wage to $10.10 over two years
WASHINGTON, DC—Congressman Jim Himes (CT-4) signed a discharge petition to require an immediate vote on a bill to lift the minimum wage to $10.10 per hour. The Fair Minimum Wage Act of 2013 (H.R. 1010), which he cosponsors, will raise the purchasing power of minimum wage salaries to help working families afford more basic necessities. This, however, is still less than the $10.74 the minimum wage would be were it adjusted for inflation since its high of $10.56 in 1968. A discharge petition needs the support of 218 members to force a vote. So far 155 members have signed this petition.
“After the worst recession in a generation, our economic recovery has left many working families behind,” Himes said. “People who work hard should not have to struggle to meet their basic needs. They deserve and need a vote on this bill.”
The legislation introduces a scaled increase in the minimum wage, raising it to $8.20 per hour three months after passage, $9.20 after one year, and $10.10 after two years. The bill also gives the Secretary of Labor authority to increase the minimum wage based on the Consumer Price Index (CPI) if warranted up to every three years. Finally, the bill increases tipped minimum wage to $3.00 per hour and also introduces a formula to increase tipped minimum wage as necessary to keep it at 70% of the overall minimum wage.
“The economic benefits of raising the minimum wage reach far beyond any individual family. When a working family brings in more money, that’s more they have to spend on necessities like groceries and gas, which they otherwise would have had to go without,” Himes said. “This creates demand in the marketplace, which help our businesses to grow and hire more workers. It is well past time we increased the minimum wage to help working families struggling to make ends meet and give our economy as a whole the boost it needs.”
Income inequality has grown steadily since the 1980s, with $1.1 trillion in annual income shifting to the top one percent of households between 1979 and 2007. This wealth gap, according to chief economists at the Senate Banking Committee, has led to increasing pessimism among the American workforce, which in turn has fueled declines in labor force participation, productivity, and the pace of economic recovery. On the other hand, several studies
over the past decade have shown that increasing the minimum wage increases worker productivity and reduces employee turnover. And contrary to arguments that raising the minimum wage will kill jobs, recent studies show that increasing the minimum wage has no significant effect on employment levels.
Studies also show that raising the minimum wage boosts the economy by giving working class families more money to spend on the things they need. In 2011, the Chicago Federal Reserve Bank found
that every dollar increase for a minimum wage worker results in $2,800 in new consumer spending over the following year.
The federal minimum wage was last re-set on July 24, 2009, at $7.25 per hour. This is lower than it was in the 1960s, when the minimum wage was equal to $10.56 in 2012 dollars, even though worker productivity has increased since then. A full-time worker earning $7.25 per hour will make $290 per week and $15,080 per year, or approximately 125% of the poverty threshold. With many minimum wage jobs not providing benefits and the costs of healthcare continuing to rise, it is essentially impossible for these workers to make ends meet from week to week.