On December 19, the Economic Policy Institute (EPI) released an updated analysis of the Fair Minimum Wage Act of 2013, legislation introduced by Senator Tom Harkins (D-IA) that would increase the federal minimum wage to $10.10 an hour. Author David Cooper finds that increasing the federal minimum wage to $10.10 an hour by 2016 would allow 27.8 million workers to receive about $35 billion in additional wages over the phase-in period, increasing the GDP by $22 billion dollars.
Since EPI’s original analysis, five states have raised their state minimum wage for 2014: California, Connecticut, New Jersey, New York, and Rhode Island. In 2014, 21 states and the District of Columbia will have a minimum wage set above the current federal minimum wage of $7.25 an hour.
Increasing the minimum wage disproportionately impacts female workers. Women account for 49.2% of the U.S. workforce, but account for 55% of workers affected by an increased minimum wage. The report also addresses stereotypes that presume low-wage workers are predominantly teenagers. In fact, only 12.5% of minimum wage workers are teens. The average age of minimum wage worker affected by a minimum wage hike is 35, and more than a third of minimum wage workers (34.5%) are at least 40 years old.
Over half (53.8%) of workers benefiting from a minimum wage boost work full time hours. Nearly a quarter (23%) have family incomes below $20,000 per year, and more than a quarter (27%) are parents. Nearly 19% of children nationally have at least one parent who would benefit from a minimum wage increase.
Cooper concludes that low wage workers are more likely than any other income group to spend additional earnings to meet basic needs, so raising the minimum wage is likely to boost overall economic activity and economic growth nationwide.
The Economic Policy Institute’s updated analysis can be found at: http://bit.ly/1hnQFg1