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It’s past time to raise the minimum wage

If we updated FDR’s statement at left it might go like this:

“Do not let any calamity-howling executive with an income of $40,000 a day,…tell you…that a wage of $392 a week is going to have a disastrous effect on all American industry.”

And a new study released today by the Economic Policy Institute provides lots of hard numbers that demonstrate just how beneficial a hike in the federal minimum wage from $7.25 to $9.80 would be (both to average families and the economy as a whole).

Key findings include:

-Increasing the federal minimum wage to $9.80 by July 1, 2014, would raise the wages of about 28 million workers, who would receive nearly $40 billion in additional wages over the phase-in period.

-Across the phase-in period of the minimum-wage increase, GDP would increase by roughly $25 billion, resulting in the creation of approximately 100,000 net new jobs over that period.

-Those who would see wage increases do not fit some of the stereotypes of minimum-wage workers.

  • Women would be disproportionately affected, comprising 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.

You can read the entire report by clicking here.

6 Comments

  1. Frank Burns

    August 14, 2012 at 3:35 pm

    Inflation has been less than 2% per year since 2009, so there is no justification to raise minimum wages. The justification from the Economic Policy Institute is that families will get more money, women get more money, workers over 20 years old get more money, workers of all ethnicities will get more money, some of the workers have a college education will get more money. Yes, everybody gets more money, so what? Does the Economic Policy Institute have anything to say about increased cost to consumers?

  2. david esmay

    August 14, 2012 at 7:59 pm

    Those consumers making more money will create more demand and the price of goods should be offset by that fact.

  3. gregflynn

    August 14, 2012 at 8:57 pm

    Less than 3% of the total US workforce make minimum wage. Historical evidence does not support an effect on the Consumer Price Index.

  4. Frank Burns

    August 14, 2012 at 9:16 pm

    There still is no justification to raise the minimum wage. Request denied.

  5. gregflynn

    August 14, 2012 at 10:00 pm

    I know what you’re thinking: “Did he spray disinfectant, or only water?” Well, to tell you the truth, in all this excitement, I’ve kinda lost track myself. But being this is a kitchen sponge, the most powerful bacteria source in the kitchen, which could blow your insides clean out, you’ve got to ask yourself one question: “Do I feel lucky?” Well do ya, punk?

         – Minimum wage Dirty Harry

  6. Hawkeye

    August 14, 2012 at 11:40 pm

    And, how many jobs will be lost in a down economy, when some employers will have to let some employees go so they can afford to increase the pay of those remaining?