The Minimum Wage

Introduction
In 2009, as many as 13 million US workers received a much needed pay raise to $7.25, after a decade held at $5.15 per hour. This minimum wage increase was set in July 24, 2009 as part of the Fair Labor Standards Act (FLSA); passed by a Democratic Congress in 2007. Nonetheless, concerns remain: the real value of the minimum wage today buys less than it did in 1956; workers who rely on tips have not received an increase in wages since 1991; and the federal minimum wage has been stagnant for three years and it doesn’t automatically rise with inflation. Many states set their own minimum wage laws; but employers across the country must comply with both federal and state wage regulations. In addition to establishing standards for minimum wages, the Fair Labor Standards Act provides regulations for overtime pay, record keeping, and child labor, affecting more than 130 million workers in the private and public sectors. Recently there have been additional Congressional efforts to address the minimum wage concerns, including:

The Fair Minimum Wage Act of 2012
Introduced by Representative George Miller on July 26, 2012, the Fair Minimum Wage Act of 2012 will increase the minimum wage in three 85-cent increments, over three years, from $7.25 to $9.80 per hour. After the third year, the rate will then be indexed to inflation. Also, the legislation will increase the required cash wage for tipped workers in annual 85 cent increases, from $2.13 per hour until the tip credit reaches 70 percent of the minimum wage. The bills are sponsored by Senator Tom Harkin (D-IA), chair of the Health, Education, Labor and Pensions Committee in the Senate, and Representative George Miller (D-CA), ranking member of the House Committee on Education and the Workforce. This bill currently resides with the Committee on Health, Education, Labor, and Pensions.

Click here to see facts on the Fair Minimum Wage Act

The Living Wage
In many areas of the country, families working in low-wage jobs make insufficient income to live given the local cost of living. The living wage is the minimum income necessary for a worker to meet basic needs including housing, transportation, food, and clothing. The living wage differs from the minimum wage in that the latter is set by law and can fail to meet the requirements of a living wage. MIT developed a living wage calculator to estimate the cost of living by specific community or region. The calculator lists typical expenses, the living wage and typical wages for the selected location.
To calculate the living wage in your area visit: http://livingwage.mit.edu/

In Massachusetts, several communities have enacted living wage ordinances to assure that employees of vendors who contract with the city/town to provide services earn an hourly wage that is sufficient for a family of four to live on or above the poverty line. These communities include Revere, Boston, Cambridge, Brookline, Somerville, Cambridge and Northampton.
Source: http://www.nelp.org/page/-/Justice/2011/LocalLivingWageOrdinancesandCoverage.pdf?nocdn=1

The Crittenton Women’s Union, a Boston-based nonprofit organization, with a mission to transform the course of low-income women’s lives so that they can attain economic independence has released several reports on the living wage in the State. The report titled: “Fits & Starts: The Difficult Path for Working Single Parents” looks at the tough choices low-wage workers must make between taking higher paying jobs and losing critical public support programs before they can afford to meet their basic living expenses. A single parent not receiving housing and child care aid will be up to $1,666 a month short of meeting her basic living costs when earning the $8 an hour minimum wage, and will not earn enough to meet all her family’s living expenses until she earns $29 an hour or $58,000 a year. To read the full report visit: www.liveworkthrive.org/reports.php

A Closer Look at the Minimum Wage in Massachusetts
In Massachusetts, a bill filed by Sen. Marc Pacheco, could give Massachusetts the highest minimum wage in the U.S. Titled “An Act to promote the Commonwealth’s economic recovery with a strong minimum wage,” (Bill S.951) this bill proposes raising the State minimum wage to $10 by incremental increases over three years. A minimum wage of $10 would leapfrog Washington State, whose $9.04 minimum is the currently the nation’s highest. The Labor and Workforce Development Committee voted to endorse the bill in March, and it currently sits with the Senate Committee on Ways and Means.
Click to view the full text of the bill

The Massachusetts Budget and Policy Center released a report titled: The Minimum Wage and Job Creation. The report finds no substantiation that the minimum wage increases has inhibited job growth in the State. Massachusetts has raised the minimum wage six times since 1995; it currently stands at $8.00. During this time period, it was discovered that: “job growth has been stronger in industries with high concentrations of minimum wage workers than in industries with low concentrations of minimum wage workers.” The report establishes that an increase in the minimum wage would increase the pay of workers who earn less than the new wage and it could help to stimulate wage increases for other low-paid workers. The Massachusetts Budget and Policy Center projects that an increase to $9.00 per hour would affect about 325,000 workers in Massachusetts; while an increase to $10.00 per hour would affect about 581,000 workers based upon data from the Census Bureau’s Current Population Survey.

Minimum Wage

Other highlights of the findings:

  • Today’s minimum wage is 24% lower than it was in 1968 (adjusted for inflation).The gap between what minimum wage workers earn and what other workers earn has grown substantially over time–especially at the top of the income spectrum.
    • A full-time minimum wage worker in Massachusetts will make $16,000 in 2012, about $5,000 less than the $21,040 he or she would earn if the minimum wage had the same value as in 1968.
  • More than one-third of those who would be affected work full time, and about one-quarter are parents of children under 1.

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