The Politics of Poverty

Ideas and analysis from Oxfam America's policy experts

6 simple reasons we should raise the minimum wage right now

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supermarket cashier making the minimum wage Publix supermarket cashier. (Photo by: Jeffrey Greenberg/UIG via Getty Images)

The Raise the Wage Act of 2019 would lift millions out of poverty, boost the economy, and save taxpayer dollars. So what’s the problem, Congress?

Today, millions of Americans do arduous work in jobs that pay too little and offer too few benefits. They serve food, clean offices, care for the young and elderly, stock shelves, and deliver pizza. They work these jobs year after year while caring for children and parents, trying to save for college, and paying their bills.

But despite their best efforts, these low-wage workers are falling further and further behind. According to a new Oxfam interactive map, the federal minimum wage of $7.25/hr is locking millions—most notably women of color and single parents—in poverty. The way we see it, if you work hard, you should earn enough to get by. And right now, the place to start is to raise this poverty wage.

That’s why today’s Congressional hearings on the Raise the Wage Act of 2019 are so important. The legislation would increase the federal minimum wage to $15 by 2024, benefiting nearly 40 million workers and their families. Here are six simple reasons why raising the wage makes sense—and should happen TODAY.

1. It is long overdue

In the decade since it was last raised, the minimum wage has failed to keep up with inflation, failed to keep up with average wages, and—most dramatically—failed to keep up with incomes of the top 1 percent and CEOs, contributing to America’s growing inequality.

As a result, low-wage workers are not benefiting from economic growth and productivity. If the minimum wage had kept pace with productivity increases, it would be around $20/hr. Just 30 years ago, the average pay gap between CEOs and workers was 59 to 1; last year, it soared to 361 to 1. The average CEO makes $13,940,000, while a minimum wage worker makes $15,080: a gap of 924 to 1.

2. It would address longstanding racial and gender inequities

Historically marginalized people, who do more than their fair share of low-wage work, would stand to benefit disproportionately from the bump.

While 27 percent of the total US workforce would benefit from the raise:

  • 39 percent of Black and Latina women would benefit (vs. 18 percent of white men);
  • 38 percent of African American workers would benefit;
  • 33 percent of Latino workers would benefit; and
  • 32 percent of women workers would benefit (vs 22 percent of men).

3. It would reduce poverty

The bump from $290 a week to $600 a week would lift millions of families out of poverty. More than a quarter of the workforce—40 million workers—would see a raise in wages.

4. It would fuel economic growth

The roughly $120 billion extra paid to workers would be pumped back into the economy for necessities such as rent, food, and clothes. Economists have long recognized that boosting purchasing power by putting money in people’s pockets for consumer spending has positive ripple effects on the entire economy.

In one recent poll, 67 percent of small business owners support the minimum wage increase to $15 an hour. They say it would spark consumer demand, which would enable them to retain or hire new employees.

And raising the wage doesn’t seem to compel employers to cut jobs. As states and cities across the country have raised wages, research has found no statistically significant effect on employment.

5. It would save taxpayer money and reduce use of government programs

When employers don’t pay people enough to survive, those workers are compelled to seek government assistance, meaning taxpayers are essentially subsidizing the corporations. 

In 2016, the Economic Policy Institute found that, among recipients of public assistance, most work or have a family member who works; and they are concentrated at the bottom of the pay scale. Raising wages for low-wage workers would “unambiguously reduce net spending on public assistance, particularly among workers likely to be affected by a federal minimum-wage increase.”

6. It’s what the vast majority of Americans want

Vast majorities (up to three quarters, including a majority across party lines) support raising the wage. In fact, over half the states have raised their minimum wages to restore basic fairness to the workforce.

All work has dignity and worth. After 10 years of working hard, low-wage workers deserve a bump to get them and their families out of poverty. But this important legislation may not pass because Congress faces an impasse along party lines.

TAKE ACTION WITH OXFAM TODAY: Tell Congress to reward hard work and restore hope for millions of working families by signing this petition urging your Members of Congress to support the Raise the Wage Act of 2019.

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