House and Senate Intro Bills to Increase Minimum Wage to $9.80
Bill Introduction Follows National Day of Action to Raise the Minimum Wage
Washington, DC – Today the U.S. Senate and House of Representatives introduced the Fair Minimum Wage Act of 2012, companion bills that would raise the federal minimum wage to $9.80 by 2014 and impact millions ofworking Americans. The introduction follows a National Day of Action in which thousands of workers and their supporters held approximately 50 events in 30 cities in a call to raise the minimum wage, boost job creation and address the nation’s growing economic inequality.
The bills are sponsored by Senator Tom Harkin (D-IA), chair of the Health, Education, Labor and Pensions Committee in the Senate, and Representative George Miller (D-CA), ranking member of the House Committee on Education and the Workforce. The National Employment Law Project applauded the legislation, highlighting how it will improve pay for millions of struggling workers and their families, and boost spending at a time when the economy is suffering from weak consumer demand.
“Millions of the nation’s lowest-paid workers are putting in long hours and working multiple jobs, yet are still struggling to afford basic expenses,” said Christine Owens, executive director of the National Employment Law Project. “Raising the minimum wage, which now provides full-time earnings of barely $15,000 a year, is an important step to make sure work provides economic opportunity and security for working families. We applaud Senator Harkin and Representative Miller for their leadership on this crucial issue.”
The Fair Minimum Wage Act of 2012 would raise the federal minimum wage from the current rate of $7.25 to $9.80 per hour by 2014, and it would provide for annual increases to the rate in future years to keep pace with the rising cost of living – a key reform known as “indexing,” which ten states have already adopted. The Harkin-Miller bills would also raise the minimum wage for tipped workers from its current low rate of $2.13 per hour, where it has been frozen since 1991, to $6.85 over five years. Thereafter, it would be fixed at 70 percent of the full minimum wage.
As underscored in Tuesday’s nationwide Day of Action, paychecks for millions of workers have been falling, even as corporate profits reach record levels. The Bureau of Labor Statistics reported last month that average weekly paychecks fell by 1.7 percent in the final quarter of last year. Congress has voted to raise the minimum wage only three times in the last 30 years, and today, the real value of the minimum wage is 30 percent lowerthan in 1968.
Recent polling reveals broad public support for raising the minimum wage: A national poll of 2012 voters earlier this year found that nearly three in four likely voters (73 percent) support increasing the minimum wage to $10 and indexing it to inflation. In 2008, then-presidential candidate Barack Obama pledged to raise the minimum wage to $9.50 by 2011, but no action has been taken. Presidential candidate Mitt Romney in January of this year stated his support for raising the minimum wage, but later claimed that no raise was necessary.
Restoring the minimum wage would play an important role in bolstering the nation’s economic recovery. The Commerce Department reported this month that retail sales fell 0.5 percent in June, the third straight month of consistently declining sales in the retail industry. Higher wages for the nation’s lowest-paid workers would put money in the pockets of people who are likely to spend that money immediately, boosting demand for goods and services in the local economy.
The Economic Policy Institute estimates that the Harkin-Miller proposal would generate more than $25 billion in new consumer spending, which would result in more than 100,000 new full-time jobs. EPI also estimates the Harkin-Miller bill would increase wages for nearly 30 million Americans – roughly one-fifth of the workforce – as raising the wage floor improves pay for workers who earn at or just above the minimum wage.
A new report from the National Employment Law Project also finds that, contrary to misimpressions, 66 percent of low-wage workers are employed by large corporations, not small businesses. It also found that more than 70 percent of the biggest low-wage employers have recovered from the recession and are enjoying strong profits – yet wages remain stagnant for their frontline employees.