Tuesday, June 25th marks the 75th anniversary of the Fair Labor Standards Act, which established the first minimum wage. However, after decades of infrequent and inadequate increases, the real value of the minimum wage has eroded, even as productivity and corporate profits have risen dramatically. EPI experts have frequently called for increasing the minimum wage and protecting the economic security of low-wage workers. Below is a roundup of some of EPI’s latest research and commentary on the minimum wage.
Commentary: Minimum Wage Workers Should Get a Raise
By Heidi Shierholz
These findings underscore the fact that the minimum wage is a basic labor standard, specifically intended to play a crucial role in rewarding work and ensuring that growth in the economy is broadly shared across the workforce. If it is allowed to erode, as it has over the last 45 years, it hurts the living standards of both low and moderate income families.
Report: Vast majority of wage earners are working harder, and for not much more
By Lawrence Mishel
Workers have been offering more to the economy and the labor market, and what they have received in return has been very disappointing. This trend is particularly evident when considering that the majority of workers increased their work hours substantially between 1979 and 2007, the last year before the current recession. However, during this period (excluding a brief interlude of strong economic growth between 1995 and 2000), real hourly wages of the bottom 60 percent grew modestly—ranging from an actual decline for the bottom fifth to annual growth of about 0.25 percent for the middle fifth. This growth is far less than the increase in economy-wide productivity over that time.
Report: Fix it and forget it
By Heidi Shierholz
The minimum wage needs to be restored to a value where it can ensure a healthy standard of living, and it needs to be indexed going forward so that its value relative to the wages of other workers no longer erodes over time simply because prices rise.
Report: Declining value of the federal minimum wage is a major factor driving inequality
By Lawrence Mishel
Contrary to some political rhetoric of late, wage stagnation for American workers and rising inequality is not due to lack of effort; the broad middle class has increased its productivity, upgraded its educational attainment, and worked more hours. Rather it is due to certain policies that have weakened the bargaining position of low- and middle-wage workers. Among these policies is the refusal to set the minimum wage at a level where it establishes a well-enforced wage floor at 50 percent of the average wage.
By David Cooper and Doug Hall
Wages for U.S. workers, particularly low-wage workers, have eroded not just in recent years, but over several decades. This erosion has contributed to the growth of income inequality, leaving the economy less vibrant than if incomes were distributed more evenly. Raising the minimum wage and incorporating a system for automatic adjustment over time is key to reversing this erosion of low-wage workers’ earnings, and would help combat growth of income inequality.
Economic Snapshot: Even at $10.10, minimum wage would be lower than it could be, given economy’s growth
By David Cooper
Had the minimum wage increased at the same rate as the average American production worker’s wages, it would be about $10.50 today. If it had been raised at the growth rate of productivity—i.e., the economy’s overall capacity to generate income per hour worked—it would be nearly $19 per hour.
Economic Snapshot: Lagging minimum wage is one reason why most Americans’ wages have fallen behind productivity
By Heidi Shierholz
If the minimum wage had kept up with productivity growth over this period, it would now be $18.67 per hour. That sounds shockingly high—it is two-and-a-half times as high as the current minimum wage and is actually higher than the median wage, which is $16.30 per hour. But it’s important to keep in mind that the primary reason a minimum wage of $18.67 sounds so high today is because the wages of most workers are so low.
Blog Post: Putting a $9 minimum wage in context
By David Cooper
Raising the minimum wage to $9.00 per hour, as the President called for in his State of the Union address, would be a good step toward reversing some of the huge decline in the purchasing power of the minimum wage that has occurred over the past 45 years. Now as lawmakers, pundits, bloggers, economists, and the public begin talking about the president’s proposal, it’s important that we keep the true value of the minimum wage in context, and look at how the president’s proposed minimum wage compares both with precedent and what the minimum wage might have been had we not let its value erode for so long.
Blog Post: Who would be affected by President Obama’s proposed minimum wage increase?
By Natalie Sabadish and Doug Hall
We have found that raising the minimum hourly rate to $9.00 by 2015 would directly boost the wages of over 13 million Americans. The increase would also have a spillover effect, bumping up wages for another 4.7 million workers who earn just above minimum wage. The demographic composition of minimum wage workers is often grossly mischaracterized, so let’s take a closer look at exactly who the 18 million workers who would see a raise under the president’s proposal really are.