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Minimum Wage up for Vote

Much-needed minimum wage increase will give workers a boost without harming businesses. See CAP's interactive map for a breakdown.

The House of Representatives voted yesterday 311 to 116 to raise the minimum wage to $7.25 an hour over two years. The Senate Finance Committee also began hearings on minimum wage legislation this week focusing on tax incentives for businesses that will be affected by the new minimum wage.

Extensive research from the Center for American Progress, including two reports and an interactive map, “State of the Minimum Wage,” however, has shown that tax incentives are unnecessary hindrance, because raising the minimum wage does not exert an adverse effect on businesses. Note the following:

  • The minimum wage increase will not cause price inflation. In Arizona, for example, the total cost of 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 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 federal minimum wage is long overdue. It has not been raised in almost a decade, and is currently at its lowest level in 50 years. During this time the House has raised its own pay nine times.

Raising the minimum wage will give a much-needed boost to 13 million workers—9.8 percent of the workforce. Seven million of these workers are supporting their families, and almost half of those are trying to support their families solely on minimum wage labor.

Over 80 percent of Americans support raising the minimum wage. Hopefully public opinion combined with the House vote tomorrow will signal to the Senate that it must work to expedite minimum wage legislation.

To read further about the minimum wage, please see:

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