Congress set the federal minimum wage at $7.25 per hour in 2009. Next Sunday will mark the 10th anniversary of that date – and there have been no adjustments for rising living costs in all that time. It is the longest period without a minimum-wage hike in American history.
Assuming a 40-hour work week with no paid time off, a worker will earn $15,080 per year under the federal minimum wage.
The Massachusetts Institute of Technology’s Living Wage calculator determines the minimum amount families must earn in different cities and states in order to meet “minimum standards of living.” According to MIT calculations, a single mother of two earning $7.25 per hour would have to work 138 hours per week to earn a living wage.
Just for the sake of comparison, the living wage floor in 1970 was $1.60. This left a pre-tax surplus of 35% after basic expenditures. In 2015, the minimum wage leaves a 6% deficit between minimum wage and minimum living.
Most American states have adopted a state-specific minimum wage to match the higher cost of living, but in 21 states the minimum wage matches the federal directive. This isn’t enough to live on, even in rural areas with a very low cost of living.
Democrats have proposed to raise the minimum wage gradually to $15 by 2024. Opponents argue that raising the minimum wage benefits only young people with entry-level jobs, but according to data, it would actually raise wages for 40 million Americans with an average age of 35.
Conservatives argue that increasing wages would affect small businesses, slowing job growth. However, research has disproved this theory several times. Not only would increasing the minimum wage improve worker retention, productivity, and customer service, it would also put more money into consumer’s pockets, boosting the overall economy.
Companies such as Walmart and Amazon have already stated their support for the Democratic legislation, but it’s not just the big players that have taken a stand. Businesses for a Fair Minimum Wage, a consortium of more than 800 companies, is working to raise awareness and increase the federal minimum wage by 2024. Most of these companies are small businesses.