Raise the Minimum Wage

A message from CREDO Action: Imagine having to feed your family, pay rent and basic services at the federal minimum wage of $7.25 per hour. 

There is not a single state in America where a worker living on current federal minimum wage can afford a two-bedroom unit working a standard 40-hour work week.¹What's more, in 2011 a minimum-wage worker after working 40 hours per week for a full year would have just one hour's worth of wages left over to spend on rent and other basic services, after paying for family health-insurance coverage.²

American families deserve better than this as our economy slowly inches out of its worst downturn since the Great Depression. We need to increase the minimum wage now, which will help millions of American families by putting them on a solid economic track. Fortunately, Senator Tom Harkin (D-Iowa) has introduced the "Rebuild America Act," which calls for raising the minimum wage from the current level of $7.25/hour to $9.80/hour — a 35 percent increase — over the course of two and a half years and then index it so it rises automatically in the future with the cost of living.³

We need to generate support for Senator Harkin's legislation because increasing the minimum wage would increase spending power for working class Americans and boost consumer confidence, revving up the nation's economic engine. Along with our friends at AFL-CIO, we believe raising the minimum wage of our workers is a "proven and effective way" to jump start our economy.⁴ Senator Harkin's legislation is an effective vehicle to provide that jump start.

The high unemployment rates that were a legacy of the Bush administration have put enormous downward pressure on wages, as employers have not felt the need to offer competitive wages to hold on to workers. The resulting low wages have increased "child and family poverty" and continue to drive up the gulf of inequality between the 1% and the 99% in America.⁵

Raising the minimum wage is critical for our economy, as the current rate of $7.25 has not kept pace with inflation and is well below its peak value in 1968. If the minimum wage had kept pace with inflation, it would currently be at $10.52.⁶

We need Congress to raise the minimum wage now to ensure that America’s working class income earners are not falling behind in our current economic climate.

The more Senators we can convince to get behind Senator Harkin's legislation, the greater leverage he will have to push Senate leadership to move his bill to the Senate Floor for a vote.

Thank you for speaking out in support of working class Americans.

Murshed Zaheed, Deputy Political Director
CREDO Action from Working Assets

1. National Low Income House Coalition, REPORT: Out of Reach 2012: America's Forgotten Housing Crisis, March 14, 2012
2. John Schmitt and Marie-Eve Augier, "Affording Health Care and Education on the Minimum Wage," Center for Economic and Policy Research, March 2012.
3. Dave Jamieson, "Raise Minimum Wage By 35 Percent, Peg It To Inflation: Senate Dem," HuffingtonPost.com, March 29, 2012.
4. AFL-CIO, Minimum wage issue page.
5. Doug Hall, "Increasing the minimum wage is smart for families and the economy," Econonomic Policy Institute, May 19, 2011.

6. David Madland, "Harkin Bill a Big Step Forward for Our Middle Class," Center for American Progress, March 29, 2012.