A Fair Minimum Wage before a Congressional Pay Raise

Bush Republicans are preparing to give Congress a pay increase. Democrats believe Congress should not get a raise before the American people do. Here are some key facts on the minimum wage. It’s time for a new direction.

A Minimum Wage Worker Would Need to Work 642 Hours – 16 Weeks of Full-Time Work -- to Pay for a Congressional Raise. Most Members of Congress currently earn $165, 200. Based on the standard formula, they could get a 2% raise in 2007, brining them to $168,504 -- an increase of $3,304. At the current rate, a worker making the minimum wage would have to work approximately 642 hours to make $3,304. That is a little over 16 weeks at 40 hours per week.

A Fair Increase in the Minimum Wage is Long Overdue. Congress and corporate executives continue to line their own pockets while ignoring the needs of the poorest Americans.

• It’s been more than 9 years since minimum wage workers last saw an increase in their wages.

• During those nine years, Congress has raised its own pay by $31,600. [CRS, “Salaries of Members of Congress,” 4/18/06]

• Twenty-one states and the District of Columbia have responded to this inexcusable inaction at the federal level by raising their minimum wages at the state level.

• The average CEO now earns 821 times more than a minimum wage worker, earning more before lunchtime on his first day of work than a minimum wage worker earns all year. [EPI Economic Snapshots, “CEO-Minimum Wage Ratio Soars,” 6/27/06]

An Unacceptably Low Minimum Wage is a Key Part of the Problem of Poverty in our Nation.

• The number of Americans in poverty has increased by 5.4 million since President Bush took office. [U.S. Census Bureau, 12/14/05]

• 37 million Americans currently live in poverty, including 13 million children. [U.S. Census Bureau, 12/14/05]

• Among full-time, year-round workers, poverty has increased by 50 percent since the late 1970s. [U.S. Census Bureau, 12/14/05]

• Minimum wage employees working 40 hours a week, 52 weeks a year earn $10,700 per year, almost $6,000 below the federal poverty guidelines of $16,600 for a family of three. [U.S. Dept. of Health and Human Services, 1/24/06]

Raising the Minimum Wage will Make a Significant Difference in the Lives of Working Families. Millions of hardworking Americans would benefit from a higher minimum wage.

• Nearly 15 million Americans will benefit from a minimum wage increase to $7.25 an hour – 6.6 million directly, and another 8.3 million indirectly. Almost sixty percent of these workers are women, and forty percent are people of color. [EPI Analysis of 2005 CPS Data, 6/8/06]

• Eighty percent of those who would benefit are adult workers, not teenagers seeking pocket change. [EPI Analysis of 2005 CPS Data, 6/8/06]

• Increasing the minimum wage will help more than seven million children whose parents would receive a raise. [EPI Analysis of 2005 CPS Data, 6/8/06]

• Raising the minimum wage to $7.25 an hour will mean an additional $4,400 a year to help minimum wage earners support their families. It would be enough money for a low-income family of three to buy:

• 15 months of groceries
• 19 months of utilities
• 8 months of rent
• Over two years of health care
• 20 months of child care
• 30 months of college tuition at a public, 2 year college [Consumer Expenditures Survey, 2003-2004]

A Minimum Wage Increase Will Not Hurt Small Businesses. The vast majority of small business owners agree that a minimum wage increase would not affect their business.

• A recent Gallup poll found that 86% of small business owners do not think that the minimum wage affects their business. [Gallup Poll, “Minimum Wage Has No Impact on Small Business,” 5/9/2006]

• Three out of four small businesses said that a 10% increase in the minimum wage would have no effect on their company. [Gallup Poll, “Minimum Wage Has No Impact on Small Business,” 5/9/2006]

• Additionally, nearly half of small business owners think that the minimum wage should be increased, and only 16% of owners think the minimum wage should be reduced or eliminated entirely. [Gallup Poll, “Minimum Wage Has No Impact on Small Business,” 5/9/2006]