Thursday, April 30, 2015

New Study Says America Can Afford A $12 Minimum Wage

A bill introduced in Congress on Thursday would raise the minimum wage to $12 by 2020. A study from a union-backed think tank says the economy could support the rise, although the bill has no chance of becoming law.

Seth Wenig / AP

The liberal-leaning Economic Policy Institute (EPI) has released new research suggesting that raising the federal minimum wage to $12 is economically feasible, sustainable, and has a historical precedent.

Essentially, it's been done before — back in 1968.

The proposed increase would roughly return the purchasing power of the minimum wage, and its value relative to average wages, to levels reached at its peak that year.

The report from the EPI was released to coincide with the introduction of a new bill to raise the minimum wage, and says the increase would likely cause little to no job loss, as opponents of wage hikes have claimed. Instead, it says there's likely even more "room to maneuver" than in the 1960s, thanks to converging median wages across states, as well as increased worker productivity and education.

The Raise the Wage Act, set to be introduced Thursday by Sen. Patty Murray (D-Washington) and Rep. Robert Scott (D-Va.), would raise the federal minimum wage for nearly 38 million workers. It would also eliminate an exemption for restaurants and other businesses that are currently permitted to pay tipped workers less than the federal minimum.

The act would affect 32% of wage-earning women (21.1 million women), 37% of African-American workers, and 40% of Hispanic workers, according to a fact sheet released by the EPI and National Employment Law Project.


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