Fair Minimum Wage Act of 2013

More than four years after the official end of the Great Recession, pay for America’s workers remains stagnant while the cost of living continues to rise. Low-wage occupations have dominated job growth in the post-recession recovery, accelerating a decades-long shift in the U.S. economy toward lower-paying jobs. At the same time, the federal minimum wage of $7.25 per hour, which translates to just $15,080 per year for a full-time worker, remains decades out of date, and the federal minimum wage for tipped workers – $2.13 per hour – has not increased in over twenty years.

The Fair Minimum Wage Act of 2013 will help restore much of the lost value of the federal minimum wage, providing America’s lowest-paid workers with an urgently needed raise while boosting the consumer spending that fuels our economy.

See below for key background and analysis of the Fair Minimum Wage Act of 2013, in addition to the following resources:

Background and Key Elements

Following President Obama’s call to raise the minimum wage in his 2013 State of the Union address, Senator Tom Harkin (D-IA), Chair of the Senate Health, Education, Labor and Pensions Committee, and Representative George Miller (D-CA), the top Democrat on the House Workforce Committee, have introduced the Fair Minimum Wage Act of 2013. It would:

  • Raise the federal minimum wage to $10.10 per hour by 2015, in three steps of 95 cents each.
  • Adjust the minimum wage to keep pace with the rising cost of living starting in 2016 – a key policy reform known as “indexing,” which ten states are already using to prevent the minimum wage from falling in value each year.
  • Raise the minimum wage for tipped workers - which has been frozen at a meager $2.13 per hour for more than twenty years – to 70% of the full minimum wage.

Restoring a Strong Minimum Wage for America’s Workers

The Fair Minimum Wage Act of 2013 would help restore the minimum wage to its historic level, making up for decades of erosion.The federal minimum wage has lost more than 30% of its value and would be more than $10.59 per hour today if it had kept pace with the cost of living over the past forty years.

Helping 30 Million Americans Make Ends Meet

  • More than 30 million workers would receive a raise from the Fair Minimum Wage Act of 2013.
  • 88% are adults over the age of twenty, 56% are womennearly half are workers of color, and over 43% have some college education.
  • More than 17 million children have a parent who would get a raise under the Fair Minimum Wage Act of 2013.
  • The average affected worker brought home approximately 49% of her household’s income in 2011.
  • 71% of tipped workers getting raises would be women – a key step for women’s pay equity.

Higher Wages to Power Economic Recovery and Growth

  • Consumer spending accounts for 70 percent of U.S. economic activity but remains tepid because consumers just don’t have the money to spend.  Wages and salaries now make up the lowest share of national income since 1966, while corporate profits are now the largest share of national income since 1950.
  • Raising the minimum wage boosts consumer demand, as low-income workers spend their higher wages at local businesses.
  • The Fair Minimum Wage Act of 2013 would generate more than $32 billion in new economic activity, translating to 140,000 new full-time jobs as higher sales lead businesses to hire more employees, according to estimates by the Economic Policy Institute.

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