The minimum wage hasn't gone up in nearly 10 years. That's a new record

Friday, June 14, 2019

The US economy is setting all kinds of records this year, and one of them is the length of time the federal minimum wage has gone without an increase.

America's base pay rate has remained at $7.25 an hour since July 24, 2009 — 3,614 days ago on Sunday. That will be the biggest time lapse since July 2007, when the wage hadn't risen since September 1997.

The decade since the minimum wage last went up also covers what in July will become America's longest economic expansion on record. But workers' pay hasn't been recovering that whole time.

In fact, after adjusting for inflation, median weekly earnings (which also account for hours worked) have risen only 2.9% since the second quarter of 2009 after dipping in the early years of the recovery. At $7.25 an hour, a full-time minimum wage worker makes only $15,080 per year — and that's assuming they worked 40 hours a week, all 52 weeks of the year, with no unpaid time off.

Researchers at the Massachusetts Institute of Technology have calculated that the average living wage in the United States —which is the pay rate that would supply basic needs for a family of four with two working parents — is $16.14 per hour, or $67,146 total.

Of course, that varies significantly across regions, which is why many local jurisdictions have taken the issue into their own hands. Voters have approved dozens of minimum wage hikes since 2009; a total of 29 states now have floors ranging from $0.25 to $6.75 above the federal level. For that reason, economist Ernie Tedeschi estimated the "effective" minimum wage is now almost $12.

The federal minimum wage dates back to 1938, when President Franklin Roosevelt signed the Fair Labor Standards Act as part of his New Deal policies to boost the economy. At the time it was just 25 cents, which would be about $4.45 in today's dollars. Congress has raised the wage 22 times since then.

Fast food workers, backed by unions, launched a campaign in 2013 to raise the minimum wage to $15 an hour. The movement, which at first seemed like a long shot, has since gone mainstream. It's in the Democratic party's official platform, and many cities, including New York, San Francisco and Seattle, have made it a reality.

All the activism comes amid a growing body of economic research showing that raising the minimum wage hasn't meaningfully lowered employment — at least in the tightening labor market of the past several years.

Even large businesses like Walmart and McDonald's, many of which have been forced to raise their own front-line worker salaries in order to attract staff, have stopped fighting minimum wage hikes. The National Federation of Independent Business remains opposed, but they're not the only voice of small companies: More than 700 businesses have signed a pledge in favor of gradually rising the minimum wage to $15 by 2024.

That's what a bill in Congress called the Raise the Wage Act would do, along with indexing the floor to inflation going forward so no further legislation would be needed in the future.

Despite Nancy Pelosi's 2017 pledge that if Democrats took control of the House "in the first 100 hours we will pass a $15 minimum wage," the bill awaits a full vote in the House, and it hasn't yet been voted on by the relevant Senate committee.

https://www.cnn.com/2019/06/14/economy/federal-minimum-wage-raise/index.html

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The minimum wage hasn't gone up in nearly 10 years. That's a new record