Commentary

$12 by 2020: New studies find average Americans deserve and desperately need a raise

Notwithstanding the latest oblivious comments of Crown Prince Jeb, the drumbeat demanding a significant increase in the national minimum wage continues to grow louder and louder — both at the grassroots level and in the world of data and research.

Confirmation of the latter can be found in two news studies highlighted last week by the wonks at the Economic Policy Institute.

In study #1, researchers at the federal Bureau of Labor Statistics found that pay for average American workers is and has been stagnant. As EPI President Lawrence Mishel explained in a post last week:

“Their analysis confirms that there has been very broad-based stagnant pay whether one examines just wages or a more comprehensive compensation measure that also incorporates changes in health, pension, and other benefits. The bottom 80 percent of workers had stagnant or declining hourly compensation while the bottom 88 percent of workers had stagnant or declining wages.”

Study #2 comes from EPI’s David Cooper. Here are the key findings:

  • A $12 minimum wage in 2020 would undo the erosion in value of the minimum wage that took place largely in the 1980s. It would also reverse the growth in wage inequality between low-and middle-wage workers over the past generation.
  • Raising the minimum wage to $12 by 2020 would directly or indirectly lift wages for 35.1 million workers—more than one in four U.S. workers.
  • Over the phase-in period of the increases, affected workers would receive nearly $80 billion in increased wages. Once the increase is fully phased-in, the average affected worker would earn roughly $2,300 more each year than she does today (assuming no change in the number of work hours).
    • The workers who would receive a pay increase do not fit the stereotypes of low-wage workers.
    • The average age of affected workers is 36 years old.
    • A larger share of affected workers are age 55 and older (15.3 percent) than are teens (10.7 percent).
    • About two-thirds of affected workers are 25 years old or older.
    • The majority of affected workers (55.9 percent) are women.
    • Workers of color would disproportionately be affected, with more than one-third of black and Hispanic workers receiving a raise.
    • Of workers who would receive a raise, the majority (57.4 percent) work full time, nearly half (45.1 percent) have at least some college experience, and more than a quarter (27.7 percent) have children.
    • More than one-third (36.5 percent) of single parents who work would receive higher pay, including nearly 40 percent of working single mothers.
    • The workers who would benefit are, on average, the primary breadwinners for their family, earning more than half (54.3 percent) of their family’s total income.
  • Indexing the minimum wage to median wages would ensure that low-wage workers share in broad improvements in U.S. living standards, and would prevent future growth in inequality between low- and middle-wage workers.

The bottom line: Despite their hard work and productivity, the 1% economy is failing most Americans. Strong and persistent public action is needed to address the situation.

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