The federal minimum wage is currently set at $7.25 and only $2.13 for tipped workers—a rate that has not changed since 2009. Contrary to popular belief, the majority of the tens of millions of workers who would benefit from an increase in the minimum wage to $15 by 2025 are not teenagers working in part-time, after-school jobs. In reality, most low-wage workers in the United States are adults working full time, mostly women and disproportionately women of color. While there may have been a time when minimum wage jobs were entry-level positions for teens and young adults to enter the workforce and gain job experience before advancing to better-paying positions, today, many workers remain stuck in low-paying jobs regardless of age or experience. For example, 43 percent of all minimum wage workers have attended at least some college and 28 percent are parents—hardly the stereotypical high school student working on the weekends for pocket money.
After adjusting for inflation, the federal minimum wage in 2021 is worth nearly 18 percent less than when it was last raised in July 2009. The negative impacts of the very low, constantly depreciating minimum wage are not just felt by the individuals being paid poverty wages: Their children and families also suffer when workers are not fairly compensated for their labor and the value they bring to their employers. The majority of adult women currently earning less than $15 per hour, for instance, are struggling to support both themselves and their families.
In 2019, even before the pandemic and resulting economic recession pulled the rug out from under working families, 41.2 percent of mothers were breadwinners for their families, meaning that they were either a single working mother or a married mother earning as much as or more than their husband. (see Figure 1) Another 24.8 percent were co-breadwinners, or married mothers bringing home at least a quarter of their family’s earnings. The rates of breadwinning are much higher for mothers currently earning less than $15 per hour who would see a direct pay increase with a higher minimum wage. Nearly two-thirds, or 64.6 percent, of these women are breadwinners for their families, and another 19.0 percent are co-breadwinners.
Women drive the majority of consumer spending, and this is especially true of mothers who tend to direct and influence spending for their families. A full-time, year-round worker making the federal minimum wage only earns about $15,000 per year. By way of reference, the poverty level in 2021 for a family of two, such as a single mother with one child, is $17,420. Tipped workers can legally be paid as little as $2.13 per hour. Although employers are required to ensure that workers earn the full regular minimum wage through their base wage and tips, enforcement is weak and tipped workers are often exposed to discriminatory behavior and harassment. Nearly 7 in 10 tipped workers are women, and in 2019, the poverty rate for female tipped workers was nearly 2.5 times that of tipped workers overall. It nearly goes without saying that for these workers, any increase in income—particularly for breadwinning mothers—is very likely to be spent on necessities such as housing, health care, food, child care, and other essentials.
Raising the federal minimum wage is not just a “nice” thing to do for workers: It is a long-overdue economic imperative. Congress should pass the Raise the Wage Act of 2021 in order to boost the incomes of working families and help support working mothers. Increasing wages for the lowest-paid workers across the country will stimulate the economy by getting more money into the hands of breadwinning mothers who are likely to spend every additional dollar they get. In addition to helping boost economic recovery and shrink the racial and gender pay gaps, increasing the earnings of more than 32 million workers would strengthen economic security and decrease poverty levels, especially for the millions of parents who are supporting their families on or around the minimum wage.
It has been 12 years since the federal minimum wage was increased. Working families cannot afford to wait any longer.
Sarah Jane Glynn is a senior fellow at the Center for American Progress.