Wednesday marks the four-year anniversary of the last time the minimum wage was raised. It has stayed stuck at $7.25 an hour since then, but if it had kept up with inflation since 1968, it would be $10.40. President Obama has called for a raise to $9 an hour, while Democrats in Congress have called for increasing it to $10.10. As minimum wage workers wait for action, here are five reasons for why it would be smart to raise it immediately:
1. It would boost the economy: A recent study by the Chicago Federal Reserve found that raising the minimum wage to $9 an hour would increase household spending by about $48 billion the following year, amounting to a .3 percent boost to GDP. And while opponents warn that a raise would hurt jobs, several studies have shown that it doesn’t have a negative effect on employment and may even help boost job growth.
2. It would lift millions out of poverty: A full-time minimum wage worker earns just $14,500 a year, meaning that if she has two kids she lives at $3,000 below the poverty line. The wage isn’t enough to make rent in any state in the country. But raising it to $10.10 an hour would lift nearly 6 million workers out of poverty.
3. It would help close the gender wage gap: Women make up two-thirds of the minimum wage earners in the country, which is why 13.1 million would be impacted by a raise. Evidence already suggests that a higher minimum wage is related to a smaller gender wage gap at the state level, pointing to a raise as a good way to help change the fact that women make 77 cents for every dollar a man earns.
4. It’s an important racial justice issue: Three and a half million people of color would be lifted out of poverty with a minimum wage raise to $10.10, representing the majority of those lifted out of poverty. People of color are much more likely to work minimum wage jobs, making up 42 percent of those workers even though they make up 32 percent of the overall workforce.
5. Americans support a raise: A poll released on Wednesday shows that 80 percent of Americans support a raise to $10.10 an hour, including more than 90 percent of Democrats and even two-thirds of Republicans, as well as 83 percent of low-income adults and nearly 80 percent of those who make more than $100,000. Voters also decided to raise the wage in three cities in November, and in fact when ballot initiatives include a raise, voters nearly always approve it by substantial majorities.