Center for American Progress

STATEMENT: The Raise the Wage Act Is Essential for Economic Recovery
Press Statement

STATEMENT: The Raise the Wage Act Is Essential for Economic Recovery

Washington, D.C. — Today, members of the U.S. House of Representatives and the Senate announced the introduction of the Raise the Wage Act, which would raise the minimum wage to $15 an hour by 2025, helping more than 30 million Americans make ends meet. The House originally passed the Raise the Wage Act with bipartisan support in 2019. Following the bill’s introduction, Winnie Stachelberg, executive vice president for external affairs at the Center for American Progress, released the following statement:

It’s been nearly 12 years since America’s minimum wage workers last received a raise—the longest period of time since the minimum wage’s creation. Since then, corporate profits have exploded while the cost for essentials such as food, rent, child care, and groceries have all increased. Still, tens of millions of workers are paid just $7.25 an hour, which is not enough to live on in any part of the country. Many of these people are the essential workers that have kept the country running throughout the pandemic.

Raising the minimum wage is essential to creating a strong economy. Research has repeatedly shown that increasing the minimum wage is one of the most effective ways to reduce poverty without significant job loss. This is especially true for workers of color and women, who, due to racial and gender discrimination, are disproportionately likely to work in low-wage jobs. Nearly 60 percent of workers who are paid the federal minimum wage are women, and 64.2 percent of  women are the sole, primary, or co-breadwinners in their households. As lawmakers work to pass policies that will provide relief for workers and struggling families in response to the economic crisis caused by the COVID-19 pandemic, the Raise the Wage Act is critical to ensuring a faster, more equitable recovery. The Raise the Wage Act would also address long-standing wage discrimination against workers with disabilities, tipped workers, and young people by gradually phasing out the subminimum wage.

Congress passed the first federal minimum wage in 1938 during the Great Recession, knowing that people having more money to spend would boost the economy. More than eight decades later, the nation finds itself in another crisis. And just as in 1938, increasing the minimum wage is an incredibly important form of economic stimulus. Research shows  that low-wage households increase their spending with every additional dollar in their wallet, meaning that a minimum wage increase won’t just help workers but also the economy more broadly.

For more information or to speak to an expert, contact Julia Cusick at [email protected].