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

Media

Worker’s Friend Or Business Drag? One Year Of Colorado’s Increased Minimum Wage

On Monday, New Year’s Day, some workers in Colorado will get a pay raise. The minimum wage will increase 90 cents, from $9.30 to $10.20 an hour. This is because Colorado voters passed a law that gradually increases the minimum wage; by the final year of the plan, in 2020, it will grow to $12 an hour.

As was the case prior to the passage of Amendment 70 in November 2016, both proponents and those in opposition to it have made arguments about its impact after the first year. Sonia Riggs, president of the Colorado Restaurant Association, is against the increased wage. She tells Colorado Matters it will cause restaurants to close and create a greater pay disparity between servers and workers in the back of the operation, like dishwashers.

Michelle Webster, manager of research and policy analysis with the Colorado Center on Law and Policy, is for the wage increase. It’s an important means of elevating the economic impact of the state’s lowest-paid workers, Webster tells Colorado Matters.

Teens, Employment, and the Minimum Wage

More than 104,000 teens (16- to 19-year-olds) work and actively contribute to the Massachusetts economy. As working teens, they learn job skills and gain experience and responsibility. Many working teens also play important roles in helping meet financial needs for not only their families but also for themselves, like paying for college. Most teen workers (about 82 percent) earn near or at the minimum wage, which as of January 2017 was $11 an hour – finalizing a three-year phase-in of an $11 an hour minimum wage in Massachusetts. Currently, teens make up 12 percent of minimum wage earners. This brief looks at who teen workers are, their contributions to family income, how a subminimum wage could affect teen workers, and whether there have been adverse effects on teen employment from minimum wage increases.

State of Working Colorado

Colorado has one of the strongest performing economies in the country. Job growth has been robust for the past several years, consistently ranking Colorado among the top states for job creation. The unemployment rate has dropped steadily since 2010 to 3.3 percent in 2016. Real median household income continues to grow and is now slightly above the pre-recession level. And poverty rates have fallen since 2012, dropping to 11 percent in 2016.

Yet, this report points to several challenges to achieving an economic recovery in Colorado that is broadly shared and enduring:

  • The median hourly wage has been falling or flat since the recovery began.
  • Economic gains are increasingly concentrated among a small share of high earners in the state.
  • While jobs have returned to the state, not all workers have returned to work.
  • Colorado is increasingly becoming a multiracial state with a persistent race-based economic divide.

Minimum wage isn’t what it used to be – it’s worse

The federal minimum wage was established in 1938 at 25¢ an hour (about $4.26 in today’s dollars). Since then it’s been adjusted 29 times to keep up with inflation and rising living standards. The most recent change was in 2009, when the minimum wage increased to $7.25 an hour — but that hasn’t been enough to maintain the value of the wage.

Adjusted for inflation, today’s minimum wage is worth about 33 percent less than it was in 1968 (the year of its peak adjusted value). Simply put, the minimum wage has not kept pace with the cost of living in America or what our society views as the basic income that a job should provide.