Alliance for Retired Americans endorses Harkin-Miller minimum wage bill
Fair Minimum Wage Act of 2013
The Fair Minimum Wage Act will raise the minimum wage back to its historic level and index it to inflation in the future so that low-wage workers do not continue to fall behind. The Act will also raise the minimum wage for tipped workers for the first time in more than 20 years, raising it to a level that is 70 percent of the regular minimum wage.
“Regular” Minimum Wage
Background: 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.
- Under the bill, the minimum wage will increase to $10.10 in three 95-cent increments: about three months after enactment ($8.20), 1 year later ($9.15), 1 year later ($10.10).
- The wage will be indexed to inflation thereafter, to keep up with rising cost of living.
“Tipped” Minimum Wage
Background: Workers who regularly receive tips (at least $30 per month) may be paid a subminimum wage. That wage, $2.13 per hour, has been frozen since 1991.
- The tipped minimum wage will increase 95 cents per year until it reaches 70 percent of the regular minimum wage.
- This will require at least 6 increases and will end at $7.10 (or more if the regular wage has risen above $10.10 because of inflation).
- The wage will be pegged to 70 percent of the regular minimum wage thereafter as the regular wage increases with inflation.
Why we must raise the minimum wage
- The American Dream is supposed to be about building a better life. If you work hard and play by the rules, you should be able to support your family, join the middle class, and provide a brighter future for your children.
- Unfortunately, this dream is nothing more than an illusion for millions of hardworking people who are trying to get by working in low-wage jobs. They are working hard and playing by the rules, but even working full-time, all year round, they can’t make ends meet, much less join the middle class.
- That’s not what America is supposed to be about. People who work hard for a living shouldn’t have to live in poverty.
- Raising the minimum wage will help make the promise of the American dream a reality again for hardworking people across the country.
- At the same time, putting money in people’s pockets will help businesses, improve our economy, and help struggling local communities thrive again. When low-wage workers get a raise, they spend that money in their local communities. This boost to consumer demand has a ripple effect benefiting the economy as a whole—businesses see increased sales and hire more workers, and GDP gets a boost as well. A fair minimum wage truly benefits everyone.
Minimum Wage Facts
- The minimum wage today is at a historic low. The minimum wage has lost more than 30 percent of its buying power since its peak in 1968. If the minimum wage had kept up with inflation since 1968, it would be worth more than $10.50 per hour today.
- More than 30 million American workers will get a raise under the bill. More than half of these are women, and 17 million women would get a raise. The vast majority (88 percent) are adult workers, not teenagers. Twenty-three million children (30 percent of American children) have parents who will get a raise.
- 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.
- Increasing the minimum wage to $10.10 per hour will give $51.5 billion in raises to millions of workers over the course of three increases, and increase GDP by nearly $33 billion as workers spend their raises in their local businesses and communities. This economic activity will generate 140,000 new jobs over the course of three increases.
- Nineteen states and the District of Columbia already have minimum wage rates above the federal level. Ten states already have indexing in place to ensure that minimum wage workers do not fall behind. Thirty states have already acted to increase their minimum wage for tipped workers above $2.13 an hour.