Due to the effects of offshoring and automation, many of our former well-paying jobs have been replaced with minimum wage jobs. In 2019, there were nearly 1.6 million American workers being paid the federal minimum hourly wage of $7.25 or less. Often referred to as the working poor, half of these people are over the age of 25 and most are women, many with families. In addition to their wages, most minimum wage earners are dependent on government benefits such as food stamps and Medicaid to survive. It is estimated that raising the minimum wage to $10.10/hour would lift nearly 2 million Americans out of government safety net programs. Advocates claim the minimum wage is too low to ensure that workers are able to meet a minimum standard of living while working a 40-hour week. These critics claim the minimum wage should be a minimum living wage, ensuring that everyone who is willing to work can get out of poverty.

Advocates claim that increasing the minimum wage is not the solution to low, unlivable wages because minimum wage increases occur infrequently and are often rendered meaningless by inflation. They say a “living wage,” indexed to inflation, holds the best promise of restoring our middle class. A living wage is the amount of income needed for workers to meet their basic needs, including food, shelter, clothing and healthcare. Some estimates have put this amount at about $15/hour. Opponents of increasing the minimum wage claim we need to be able to compete globally and that businesses can’t afford to pay higher wages without laying employees off.

Others disagree saying studies show that areas with higher wages do not suffer higher unemployment. They warn it is foolhardy to participate in a “race to the bottom” of the global labor market. Supporters acknowledge the modest effect a living wage could have on our economy, but point out that ours is a consumption-based economy, its success dependent upon our worker’s ability to buy the items we produce.

Pending Legislation: H.R.122 - Original Living Wage Act
Sponsor: Rep. Al Green (TX)
Status: House Committee on Education & the Workforce
Chair: Rep. Virginia Foxx (NC)