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CURRY: Time to Raise Minimum Wage

George E. Curry | 11/20/2013, 3 p.m.
George E. Curry

The first federal minimum wage of 25 cents an hour was established in 1938. Since then, it has been raised 22 times. It’s time to increase the floor for the 23rd time, from its current $7.25 to at least $10 an hour. According to the Center for Economic Policy Research, the value of the minimum wage peaked in 1968. If the minimum wage had been indexed to the official Consumer Price Index each year, the minimum wage today would be $10.52. The last time the minimum wage was raised was in 2007, when it was raised from $5.15 to $7.25.

Still, there is resistance.

Republican leaders say raising the minimum wage will cost jobs. But opponents, such as Washington Post columnist Jared Bernstein, argue that rather than job loss, employers compensate by charging higher prices and increasing productivity.

The federal minimum wage is covered by the Fair Labor Standards Act. There are approximately 3.6 million workers, or 4.7 percent of all hourly paid workers who are at or below the federal minimum wage of 7.25 an hour. Employers are allowed to pay students and the disabled – defined as those “whose earning or productivity is impaired by age, physical or mental deficiency, or injury” – less than the minimum wage. It also places limits on workers who derive part of their income from tips.

A study by the Congressional Research Service found that 40 percent of those earning the minimum wage or less work in “food preparation and serving related occupations.” It also discovered that 72.2 percent have at least a high school diploma and 8 percent have a bachelor’s degree or higher.

Robert Greenstein, president of the Center on Budget and Policy Priorities testified before Congress in February: “I would note that over recent decades, the minimum wage has been allowed to erode and is now 20 percent lower, after adjusting for inflation, than in the late 1960s. For this and a number of other reasons (relating in part to globalization of the economy), wages for low-paid jobs have fallen.”

A fact sheet by Economic Policy Institute found, “A disproportionate share of minorities will benefit from a minimum wage increase. African Americans represent 11% of the total workforce, but are 18% of workers affected by an increase. Similarly, 14% of the total workforce is Hispanic, but Hispanics are 19% of workers affected by an increase.”

Washington State has the highest state minimum wage at $9.19, indexed to inflation. California enacted a law that will raise its minimum wage to $10 over three years. Some cities have wages that are even higher. The minimum wage is $10.55 in San Francisco. And in the recent election, New Jersey voters approve a constitutional amendment increasing the minimum wage from $7.25 to $8.25.

Where city or state minimums exceed the federal standard, workers receive the higher wage.

The movement to increase the federal minimum wage has stalled in Congress. In March, the House voted 233 to 184 against raising the minimum wage to $10.10 by 2015, with all Republicans voting in the majority.

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