Raising the minimum wage to $10.10 would lift the standard of living of 27.8 million American workers, according to a new study of the Fair Minimum Wage Act of 2013 by the Economic Policy Institute (EPI).
An hourly minimum wage of $10.10 would provide $35 billion in additional income and increase GDP by $22 billion, creating approximately 85,000 new jobs.
Since EPI’s previous study, Rhode Island, New York, New Jersey, Connecticut and California have adopted higher state minimum wages than the federal minimum of $7.21. In 2014, the number of states with a higher minimum wage will rise to 21, plus the District of Columbia.
Minimum hourly wages in OECD economies (US dollars):
Federal minimum wage of $7.21 is too low
The EPI believes this increase in states adopting a higher minimum wage than the federal $7.21 is a growing sign that it is an inadequate wage floor.
David Cooper, author of ”Raising the Federal Minimum Wage to $10.10 Would Lift Wages for Millions and Provide a Modest Economic Boost”1, said:
“It’s great that we’re seeing states move ahead and not wait for Congress to act, but with millions of workers struggling to get by, wage growth flatlining, and businesses clamoring for more customers, we need federal legislation to raise wages nationwide and put more money in the pockets of people who will go out and spend it right away.”
Cooper believes a nationwide minimum wage increase to $10.10 would not only raise the incomes of nearly thirty million Americans and their families, but would also provide a much-needed boost for the US economy which is mainly driven by consumer spending.
Regarding raising the federal minimum wage to $10.10 per hour, Cooper points out that:
- The average age of affected employees is 35 years.
- Almost 88% of those who would be affected are aged 20 years or more.
- 34.5% of those who would be affected are aged 40+ years.
- 54% of those who would be affected are full-time workers.
- 69% of those who would benefit live in low-income households (less then $60,000 per year).
- Most of the affected workers bring in more than half their family’s total income.
Work status of those affected by raising minimum wage to $10.10:
(Source: Economic Policy Institute)