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AFL-CIO Now

Minimum Wage Boost Could Create 100,000 Jobs

When wages rise, workers and communities benefit. So imagine how improved our national economy would be if the wages of nearly 30 million workers got a boost?

If Congress acted to raise the federal minimum wage to $9.80 by July 1, 2014, some 28 million workers would see a pay increase, according to the Economic Policy Institute’s (EPI) latest report on the minimum wage. Further, those workers would receive nearly $40 billion in additional wages over the phase-in period.

During an across the board phase-in period of the minimum-wage increase, the U.S. gross domestic product (GDP) would increase by roughly $25 billion, resulting in the creation of approximately 100,000 net new jobs, according to EPI (click on chart at left to expand).

Maybe that’s because raising the minimum wage is a matter of fairness and basic American values: The minimum wage would be $10.55 an hour if it matched the inflation rate. Now it’s $7.25 an hour.

Maybe that’s because raising the minimum wage is a matter of fairness and basic American values: Now at $7.25 an hour, the minimum wage would be $10.55 an hour if it matched the inflation rate.

The newest EPI report reiterates some of its earlier findings, which refute the stereotypes often associated with minimum-wage workers:

  • Women would comprise 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.

On July 26, Sen. Tom Harkin introduced a stand-alone minimum-wage bill, S. 3453, The Fair Minimum Wage Act of 2012. On the same day,
Rep. George Miller (D-Calif.) introduced legislation in the House of Representatives, H.R. 6211, mirroring Harkin’s minimum-wage legislation.

Congress is home for summer vacation right now, but lawmakers will be back. And when they return, the AFL-CIO, as well as noted economists, urge them to pass the Fair Minimum Wage Act of 2012 (read letter here). 

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