In his 2013 State of the Union address President Obama’s called on Congress to raise the minimum wage. Subsequently Senator Tom Harkin (D-IA) and Representative George Miller (D-CA) introduced the Fair Minimum Wage Act of 2013. It would:
- Raise the federal minimum wage to $10.10 per hour by 2015, in three steps of 95 cents each.
- Adjust the minimum wage 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.
- 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 full minimum wage.
The Bottom Line on Minimum Wage and Job Growth:
Two decades of rigorous economic research have found that raising the minimum wage does not result in job loss. While the simplistic theoretical model of supply and demand suggests that raising wages reduces jobs, the way the labor market functions in the real world is more complex. Reseachers and businesses alike agree today that the weight of the evidence shows no reduction in employment resulting from minimum wage increases.
The congressional proposal to raise the federal minimum wage will move the lowest paid workers in our economy less than half the way to where they should be based on the historical income growth.
It’s time to move minimum wage further for all Americans.
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