The federal minimum wage has been set at $7.25 per hour since 2009, and the true purchasing power of this salary has been losing ground for more than a generation. While efforts to raise the minimum have fizzled in recent years, the issue will almost certainly come up for debate after the new president and Congress take office. Yet the battle lines are firmly drawn between those who think a higher minimum wage is a panacea for millions of working class Americans, and those who believe it will cause higher unemployment and hurt economic growth. To confuse the matter, there are studies that seem to support both sides of the argument. Here are a few pertinent numbers regarding the U.S. federal minimum wage.
Estimated number of American workers who earned the U.S. minimum wage or less in 2015
According to the Bureau of Labor Statistics, roughly 3.3 percent of all hourly paid workers make the federal minimum wage or less. The BLS notes that the number of workers making minimum wage or lower stood at 13.4 percent in 1979, when the agency first began collecting that information.
Workers who would see higher income if the minimum wage is raised to $10.10 per hour
This is the finding of a 2014 study by the non-partisan Congressional Budget Office. The study notes that a wage increase would also result in higher salaries for those currently making just above minimum wage, as well as those with higher rates who would expect to see their salaries rise above the new minimum level. However, the study found that increase would reduce total employment by about 500,000 jobs.
$15 Per Hour
Federal minimum wage supported by Fight For $15 advocates
The Fight For $15 movement began in 2012 with a strike by more than 100 fast food workers in New York City. Since then, hundreds of other demonstrations have been held around the U.S. and even in other countries. Bernie Sanders endorsed the wage and the movement, although Hillary Clinton has voiced support instead for a $12 federal minimum. She points out that a $15 hourly wage that makes sense in high-cost areas such as New York City could spell trouble in rural areas.
Estimated jobs lost if the federal minimum wage is set at $15 per hour
This is the finding of a 2015 study co-authored by a former director of the Congressional Budget Office. The study also notes relatively few people in poverty would be helped. “Of the increase in income for low-wage workers, only 6.7 percent would go to families in poverty. In other words, this is reverse–Robin Hoodism: taking jobs and income from the poorest to give to those who are better-off.”
Number of economists who signed a letter to President Barack Obama supporting an increase of the federal minimum wage to $10.10
The 2014 letter, also signed by seven Nobel Prize winners, noted that, “In recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market. Research suggests that a minimum-wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and job growth, and providing some help on the jobs front.”
Percentage of workers over the age of 25 who make minimum wage or less
According to the BLS, this compares with 11 percent of teen workers who make minimum wage or less. Pro-business groups often point out that the majority of minimum wage-level employees are not trying to support a family, but are teens or college students gaining valuable job experience.
$9.67 Per Hour
Federal minimum wage in 2015, if the $2.30 minimum wage from 1976 had kept pace with inflation
First enacted in 1938, the federal minimum wage reached its peak of relative purchasing power in the 1960s and ’70s, but declined sharply in the 1980s and has continued to trend downward.
$28 Per Hour
Today’s minimum wage if the wage in 1968 had increased at the same rate as the pay of the top 1 percent of Americans
This figure, from a 2013 Economic Policy Institute study, underlines a common theme in talking about the U.S. economy in recent years. For the past generation, the wealthiest tier of Americans have seen much greater income gains than those in lower pay levels.