The Obama administration is working to keep its minimum wage hike proposal in the public eye, and simultaneously appears to be pushing back against critics who charge that raising the minimum wage would not help working families.
On Feb. 28, the U.S. Department of Labor released a report detailing the demographic characteristics of minimum wage earners. According to the report, compiled by DOL’s Bureau of Labor Statistics, 1.6 million workers earned the federal minimum wage ($7.25) and 2 million earned lower than the federal minimum. (It is worth noting that tipped employees receive $2.13 per hour with the understanding that tips bring their wages up to $7.25.)
Almost half of workers earning at or below federal minimum wages, 49.4 percent, are age 25 or older; and 26.5 percent of workers earning minimum wage are between the ages of 20 and 24, the report said.
Opponents of raising the federal minimum wage often argue that increases only impact very young workers and would therefore have little impact on household income levels.
The federal minimum wage was last increased in 2009 when it went from $6.55 to $7.25. In his January State of the Union Address President Obama said he wants to raise the federal minimum wage to $9 per hour by 2015 and index it to inflation moving forward to keep up with the cost of living.
“Workers earning the federal minimum wage have not had a raise in nearly four years. As the report makes clear, many are working adults with full-time jobs, and we know that some low-wage workers are holding down more than one job,” said Seth Harris, Acting Secretary of Labor. “It is an outrage that someone who works full time should have to raise his or her family in poverty. Ensuring hard work is rewarded is the right thing to do for these workers and our economy. “
Harris noted that the White House Council of Economic Advisers has said that raising the federal minimum wage will result in paycheck increases for almost 15 million low-wage workers.
“That money would be spent locally at the grocery store, to buy school supplies and clothing for children, to pay rent and utility bills, and in many other ways to support families,” Harris said.
The full report is available here.
An example of criticism about the president’s policy goal comes from Paul DeCamp, a partner in the Washington, D.C., office of Jackson Lewis LLP and a former U.S. Department of Labor Wage and Hour Administrator in the Bush administration. He told Thompson Information Services that while the goal of helping low-wage workers is laudable, three issues would make a hike in the minimum wage unlikely: (1) gridlock in Congress; (2) common and widespread misunderstandings about minimum wage and those who earn it; and (3) the fact that minimum wage levels already are being addressed at the state level.
Customers of Thompson Information Services’ Fair Labor Standards for Public Employers and Fair Labor Standards for Private Employers can read more about Obama’s proposal and DeCamp’s analysis of it here.