On April 30, Sen. Patty Murray (D-WA) and Rep. Bobby Scott (D-VA) are expected to announce a new proposal to raise the federal minimum wage to $12 per hour by 2020. The Raise the Wage Act would phase the new minimum wage in slowly, beginning with $8 per hour in 2016 and increasing in single-dollar increments over the following four years. Starting in 2020, the minimum wage would be indexed to inflation to protect its value in future years. In addition, Murray and Scott’s proposal would slowly phase out the so-called tipped minimum wage, which has been stuck at $2.13 since 1991.
It has been six years since the federal minimum wage of $7.25 per hour was last raised; each year, its purchasing power falls as price levels rise. Despite the success of recent campaigns at the state and—increasingly—local levels, 21 states have remained bound by $7.25 since 2009.
If it were passed, the most important outcome of the Murray-Scott bill would be a long-overdue raise for struggling workers. A large body of economic research has explored the benefits of minimum-wage increases: Past increases in federal, state, and local minimum wages have increased earnings and reduced poverty among low-wage working families without leading to job loss.
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