Last year, Americans voted to take the country in a much-needed new direction by electing Democrats to lead Congress. Democrats promised to seek better pay for working Americans, starting by raising the federal minimum wage to $7.25/hour. In May, after a decade-long battle, Congress, under Democratic leadership, accomplished that important goal. While the Senate passed H.R. 2, the Fair Minimum Wage Act of 2007 earlier in the year, the wage was finally increased as part of P.L. 110-28, the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007 (2007 Emergency Supplemental).
The legislation will raise the federal minimum wage from $5.15/hour to $7.25/hour in three steps over two years, benefiting millions and helping to reverse years of wage stagnation. From a fact sheet released by the Democratic Policy Committee (DPC) entitled, After a Ten Year Battle, Democrats Raise the Minimum Wage for American Workers:
Raising the minimum wage to $7.25/hour will help some low-income families out of poverty. An increase in the minimum wage to $7.25/hour will add nearly $4,200 to a full time, year round minimum wage worker’s income. In some areas, this additional money will be enough for a low-income family of three to cover months of groceries, utilities, or rent or nearly two years of child care or college tuition at a public two-year college. More importantly, when combined with the EITC and assistance programs, the additional income could lift a family of four above the poverty line, even afterpayroll taxes. While still not good enough, raising the minimum wage to $7.25/hour is a move in the right direction toward ensuring economic security for working Americans. (Center for Budget and Policy Priorities, “A $7.25 minimum wage would be a useful step in helping working families escape poverty,” 1/5/07)
Millions of Americans will benefit from an increase in the minimum wage. Nearly 13 million workers, 10 percent of the U.S. workforce, will directly or indirectly benefit from a raise in the minimum wage to $7.25 per hour.
- 5.6 million workers (four percent of the workforce) will benefit directly.
- 7.4 million workers (six percent of the workforce) will benefit indirectly via resulting raises.
- 59 percent of those who will benefit are women.
- 10 percent of those who will benefit are single parents and 26 percent are parents.
- 18 percent of those who will benefit are Hispanic American.
- 16 percent of those who will benefit are African American.
In addition to workers, millions of American families will benefit from a raise in the minimum wage, including the 46 percent of affected families who have a minimum wage earner as their sole breadwinner and 6.4 million children who will see their parents’ earnings increase. (Economic Policy Institute, “Minimum Wage Issue Guide,” 4/07; Jared Bernstein Testimony before Senate Finance Committee, 1/10/07, “Minimum Wage Trends, Understanding past and contemporary research,” 10/24/06)
While more needs to be done, raising the minimum wage is an important step toward economic security for many Americans. As we continue our work on behalf of the American people, the nation can be assured that Democrats are as committed as ever to supporting workers and their families.