Minimum Wage

Basics
The federal minimum wage was first enacted in 1938 as part of the Fair Labor Standards Act (FLSA). Initially just 25 cents per hour, it has been raised numerous times in the decades since. It is now $7.25/hour. But in real (inflation-adjusted) dollars, the minimum wage reached its peak in 1968. The current minimum wage is worth only about a third of the average American wage. The federal minimum wage law covers most workers, but notable exemptions include many agricultural workers, some seasonal and recreational workers, companions for the elderly, salaried administrative or sales employees, and many casual workers (such as babysitters). There are discrete “subminimum” wages for “tipped” employees, Most (but not all) states also have minimum wage laws (an employee covered by both state and federal minimum wage law, is entitled to the higher of the two). Currently, seventeen states and the District of Columbia (map) have a minimum wage higher than the federal rate. Five states currently have no state minimum wage law at all, and five have a state minimum wage that is lower than federal law (these apply only to workers not covered by federal law). The minimum wage enjoys wide and bipartisan support. It raises the floor for the most vulnerable and disadvantage workers (including women, minorities, and single-parents). It rewards work and, like all policies that put money in the pockets of working families, helps to stimulate consumption and economic growth. The social and economic benefits of a high and stable minimum wage are enormous.

Current Landscape
Despite its demonstrable benefit and popularity, the minimum wage is not immune from attack by shortsighted state legislatures. Most of these attacks take the form of efforts to repeal or water down or provisions which index the state minimum to increases in the cost-of-living.

FAQ
Who benefits from the minimum wage?

Erroneous stereotypes persist of minimum wage workers as middle-class teenagers working part-time jobs. In fact, a majority of minimum wage earners are adults working many hours and living in low-income households. Of the 4.5 million minimum wage workers who directly benefited from the most recent minimum wage increase, fully three quarters were adults and more than half belonged to families with family income less than $35,000 a year. Almost two-thirds of these benefiting from the most recent increase were women.

What effect does a higher minimum wage have on job or economic growth?

Contrary to popular belief, increasing the minimum wage does not cause job loss. A range of recent research (see “research” tab) demonstrates that an increase in the minimum wage has a small, and even positive, impact on employment. Any increase in employment costs is more than offset by accompanying gains in worker productivity, and by the stimulus of raising the wage floor. Raising the minimum is good for workers and good for the economy. For a video summary of this recent research, click HERE.

Learn More
The best source for recent minimum wage research, legislation, and campaigns is the National Employment Law Project (NELP). NELP’s RaiseTheMinimumWage.org site provides visitors with the latest research and analysis and tracks state and federal campaigns to raise wages across the nation. The site also provides polling data, news clips, fact sheets, videos, and links to current campaigns and additional resources. Some of the key recent research on employment and job effects has been done by the UC Berkeley Institute for Research on Labor and Employment. Legislative updates and recent research can also be accessed through the minimum wage and living wage issue guides maintained by the Economic Policy Institute, the AFL-CIO, the Let Justice Roll Living Wage Campaign, the Political Economy Research Institute, and the Coalition on Human Needs.

Video Introduction

Recent Research Highlights

Minimum wage issue guide

Added March 14, 2011 Source: Economic Policy Institute
Issue: Minimum Wage

Added July 26, 2011 Source: Policy Matters Ohio
Issue: Minimum Wage, Wage Theft
State: Ohio

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