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The Facts About Minimum Wage

Analysis of the impact minimum wage increases will have and a user friendly interactive map for state-by-state numbers

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Contact: Madeline Meth
Phone: 202.741.6277
Email: mmeth@americanprogress.org

WASHINGTON, D.C. – Since 1997, the federal minimum wage has been stuck at $5.15. The new Congress plans to introduce legislation raising the minimum wage to $7.25—an increase that is long overdue.

This minimum wage increase would boost earnings for 13 million American workers—9.8 percent of the workforce.

• Twelve million adult wage-earners, 80 percent of the minimum wage-earning population, will directly benefit from a minimum wage increase.
• Seven million families with children—46 percent of the total low wage-earning families with children—currently receive all of their earnings from minimum wage jobs.
• Nine million women (59 percent of minimum wage earners) and six million people of color (40 percent of minimum wage earners) will directly benefit from a minimum wage increase.
• Raising the minimum wage will increase annual earnings to $15,000 from $10,700. Without this increase, a family of three supported by one minimum wage earner will live roughly $5,400 below the federal poverty line.
• At the 350 largest public companies, the average CEO total direct compensation was $11.6 million in 2005. At this rate of compensation, it takes the average CEO only one hour and 55 minutes to earn the annual pay of a minimum wage worker.

The minimum wage increase will not harm our economy.

• The minimum wage increase will not cause price inflation. In Arizona, for example, the total cost of the wage increases is equal to 0.08 percent of total sales. The average business can fully cover the cost of the minimum wage by increasing revenue by less than 0.1 percent.
• The minimum wage increase will not destroy job growth. Between 1997 and 2003, small business employment increased by 9.4 percent in higher minimum wage states, compared to 6.6 percent in states at the federal level.
• The minimum wage increase will not shut down small businesses. Between 1998 and 2003, the number of small businesses increased by 5.5 percent in higher minimum wage states, compared to 4.2 percent in states at the federal minimum wage level.

Raising the minimum wage is a progressive issue that resonates with the American public and bridges the partisan divide.

• A 2006 opinion poll found that 83 percent of Americans support an increase in the federal minimum wage.
• A decade of federal inaction has prompted 29 states (including D.C.) to raise the minimum wage above $5.15.
• The minimum wage is an opportunity for bipartisanship. In 2006, the governors and state legislatures of California, Michigan, and Pennsylvania worked across party lines to raise the minimum wage.
• In 2006, the minimum wage ballot initiatives had a “6-0” winning record in six states that voted for George Bush in 2000 and 2004. The minimum wage presents an issue that can unite, rather than divide, America.

Click here to see an interactive map with minimum wage breakdowns by state, year, and wage levels.

Endnotes

1. Economic Policy Institute, Minimum Wage Issue Guide, Nov. 2006
2. Annual calculation assumes a 40-hour work week and 52 weeks of work (2080 hours per year). Center for American Progress, “The Gap Between CEOs and America’s Middle Class Widened in 2005,” April 13, 2006
3. Center for American Progress, Economic Analysis of the Arizona Minimum Wage Proposal, Oct. 30, 2006
4. Center for American Progress, Good for Business, May 2006
5. Ibid.
6. Pew Research Center for the People and the Press, Maximum Support for Raising the Minimum, April 19, 2006

To speak with our experts on this topic, please contact:

Print: Allison Preiss (economy, education, poverty)
202.478.6331 or apreiss@americanprogress.org

Print: Tom Caiazza (foreign policy, health care, energy and environment, LGBT issues, gun-violence prevention)
202.481.7141 or tcaiazza@americanprogress.org

Print: Chelsea Kiene (women's issues, Legal Progress, Half in Ten Education Fund)
202.478.5328 or ckiene@americanprogress.org

Spanish-language and ethnic media: Tanya Arditi
202.741.6258 or tarditi@americanprogress.org

TV: Rachel Rosen
202.483.2675 or rrosen@americanprogress.org

Radio: Chelsea Kiene
202.478.5328 or ckiene@americanprogress.org