Minimum Wage

The federal minimum wage was established in 1938, as part of the Fair Labor Standards Act (FLSA), to ensure that all work would be fairly rewarded and that regular employment would provide a decent quality of life. Congress makes periodic amendments to the FLSA to increase the federal minimum wage; however, since the 1960s, Congress has adjusted the federal minimum wage infrequently, enacting raises that have never been adequate to undo the erosion in the minimum wage’s value caused by inflation. This decline in purchasing power means low-wage workers have to work longer hours just to achieve the standard of living that was considered the bare minimum almost half a century ago. The decline in the value of the minimum wage has contributed to wage stagnation, and is directly responsible for widening inequality between low- and middle-wage workers.

In light of Congressional inaction, many states, cities, and counties have enacted their own higher minimum wages, with EARN groups providing the key research and analysis evaluating proposed minimum wage increases. In doing so, they are taking steps to help workers afford their basic needs, bring them closer to the middle class, and ensure that even the lowest-paid workers in their jurisdictions will benefit from broader improvements in wages and productivity.

As of 2017, the federal minimum wage was worth 25 percent less than it was in 1968.

There are 7 states that have no minimum-wage law or a minimum wage below the federal minimum wage. The federal minimum wage applies in all of these states.

Publications

Publication

Florida Policymakers Need to Reassess How the Minimum Wage is Enforced

In November 2020, Floridians made the historic decision to move an estimated 2.5 million Floridians closer to a living wage with the passage of Amendment 2. The state minimum wage increase goes into effect in September 2021, increasing from $8.65 to $10 per hour, then rising by $1 per hour each year until it reaches $15 in 2026.

In anticipation of this increase, Florida Policy Institute (FPI) and Rutgers University’s Center for Innovation in Worker Organization (CIWO) assessed the extent to which the current state minimum wage is enforced. FPI and CIWO analyzed over 15 years of U.S. Census data and recent records obtained from the Florida Attorney General’s Office to do so.

Failing to pay workers the minimum wage is but one of many forms of wage theft. However, given the timeliness of Amendment 2, wage theft in this report refers solely to minimum wage violations among low-wage workers (those with incomes in the bottom 20 percent) unless otherwise indicated.

FPI and CIWO’s analysis finds:

  • The minimum wage has been largely unenforced for at least a decade.
  • After Florida’s 2005 minimum wage increase, its minimum wage violation rate more than doubled to 17 percent by the end of 2007.
  • Victims of wage theft lose 18 percent of the minimum wage to which they are entitled, on average, or $1.32 per hour.
  • Floridians in the state’s top industries (agriculture, service, and real estate) suffer the highest wage theft rates.
  • Black, Latina, and immigrant women are more likely to face wage theft than their peers.
  • If these violation rates persist, Florida could expect to lose an average of $25.3 million in sales tax revenue each year over the next six years.

Before Amendment 2 goes into effect, Florida policymakers should mitigate these unsettling trends by reintroducing a State Department of Labor equipped with the authority and resources necessary to ensure working Floridians are paid the wages they are entitled to.

Publication

Why A $15 Federal Minimum Wage Will Help Colorado Workers

Highlights

  • Even though Colorado voters have approved a minimum wage in excess of the Federal wage, the current $15 per hour plan to gradually increase the federal minimum wage would increase wages for more than 550,000 Coloradans by 2025. 
  • The proposed federal changes in the wage level restore the purchasing power of the minimum wage to levels not seen since the late 1960s.
  • Workers who earn low incomes tend to spend—rather than save—a high percent of their income. This increase in wages can increase local economic activity.
Publication

Minimum Wage Increase to $15 Means More Income for 1.6M in PA

Governor Wolf’s budget includes a plan to raise the current $7.25 per hour minimum wage to $12 in July 2021, followed by 50-cent increases yearly until July 2027, where it will be set at $15 per hour. This proposal also aims to eliminate the tipped minimum wage, allowing currently tipped workers to join the climb to $15 starting with $12 in July 2021. In this report, we outline the demographic characteristics of workers who will benefit from this plan to increase the minimum wage.

A Minimum Wage Boost Would Improve Equity for 2.5 Million Floridians and Bolster the State’s Post-Pandemic Recovery

On November 3, voters will have the opportunity to decide whether 2.5 million working Floridians receive a wage increase: Amendment 2 seeks to gradually increase the state minimum wage to $15 per hour by 2026. As with all constitutional amendments, 60 percent of voters must vote in favor of Amendment 2 for it to become law.

Using the minimum wage simulation model developed by Economic Policy Institute, this report finds that by 2026, the proposed $15 minimum wage would:

  • increase wages for 2.5 million Floridians, over 26 percent of the workforce;
  • help lift households out of poverty;
  • bring workers of all ages closer to a living wage;
  • benefit Florida’s service sector workers the most; and
  • reduce pay inequities experienced by women and people of color.