Raising the Minimum Wage to $10.10 Would Lift Wages for Millions, Provide a Modest Economic Boost
EPI Updates Minimum Wage Research as States Move on Wage Increases
Published on Dec 23, 2013 - 5:11:03 AM
Dec. 19, 2013 - Today, the Economic Policy Institute released an updated analysis of the Fair Minimum Wage Act of 2013. In Raising the Federal Minimum Wage To $10.10 Would Lift Wages for Millions and Provide a Modest Economic Boost, EPI policy analyst David Cooper shows that increasing the federal minimum wage to $10.10 would give a raise to 27.8 million workers, who would receive about $35 billion in additional wages. A $10.10 minimum wage would increase GDP by $22 billion, creating roughly 85,000 new jobs.
Since EPI's previous analysis, five states—California, Connecticut, New Jersey, New York, and Rhode Island— have adopted higher state minimum wages. By 2014, 21 states plus the District of Columbia will have set minimum wages above the federal minimum of $7.25. These increases underscore the growing recognition that the federal minimum wage is no longer an adequate wage floor.
"It's great that we're seeing states move ahead and not wait for Congress to act," said Cooper, "but with millions of workers struggling to get by, wage growth flatlining, and businesses clamoring for more customers, we need federal legislation to raise wages nationwide and put more money in the pockets of people who will go out and spend it right away."
While these recent state-level increases—particularly California's increase to $10 in 2015—slightly alter EPI's original estimates, raising the federal minimum wage to $10.10 would lift the incomes of millions of working families, boosting their spending power at a time when the U.S. economy is in need of increased consumer spending.
Cooper's analysis also outlines the demographics of workers who would benefit from an increase of the federal minimum wage to $10.10 per hour, noting that:
- The average age of affected workers is 35 years old, nearly 88 percent of workers who would benefit are at least 20 years old, more than a third (34.5 percent) are at least 40 years old.
- Of affected workers, about 54 percent work full time, about 69 percent come from families with family incomes less than $60,000, and more than a quarter have children.
- The average affected worker earns half of his or her family's total income.
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