The Fair Minimum Wage Act Would Raise the Minimum Wage and then Index it to The Cost of Living
THE PRESENT FEDERAL MINIMUM WAGE HAS LOST OVER 30% OF ITS VALUE OVER THE PAST 40 YEARS
Led by Senator Tom Harkin (IA) and Congressman George Miller (CA), the Fair Minimum Wage Act of 2013 (S. 460 / H.R. 1010) was introduced in early March, 2013. This vital legislation would increase the federal minimum wage to $10.10 by 2015, in three steps of 95 cents each. It would then adjust the minimum wage each year to keep pace with the rising cost of living starting in 2016 – a key policy reform known as “indexing,” which ten states are already using to prevent the minimum wage from falling in value each year. Finally, the proposed bill would raise the minimum wage for tipped workers – which has been frozen at a meager $2.13 per hour for more than twenty years – to 70% of the minimum wage.
The Fair Minimum Wage Act of 2013 would help restore the minimum wage to its historic level, making up for decades of erosion. The federal minimum wage has lost more than 30% of its value and would be more than $10.55 per hour today if it had kept pace with the cost of living over the past forty years. More than 30 million workers would receive a raise from the Fair Minimum Wage Act of 2013; the majority of this money would be directly reinvested into our national economy. The Fair Minimum Wage Act of 2013 would generate more than $32 billion in new economic activity, translating to 140,000 new full-time jobs as higher sales lead businesses to hire more employees. Furthermore, of the workers who would benefit from this legislation, 88% are adults over the age of twenty, 56% are women, nearly half are workers of color, and over 43% have some college education.
The current wage of $7.25 was implemented in July 2009, the final of three increases resulting from 2007 legislation signed by President George W. Bush. The minimum wage today pays only $15,000 per year, which is $3,000 below the poverty level for a family of 3. The Fair Minimum Wage Act will boost the minimum wage to $21,000, lifting families above the poverty line.
The Fair Minimum Wage Act brings the minimum wage to an acceptable base, and then indexes it to inflation so that it does not take an act of Congress to make certain that it keeps pace with the economics of our time.