Attached please find legislation - the Catching Up To 1968 Act of 2012 - that I will introduce in the House of Representatives today regarding raising the minimum wage to $10 per hour. That may sound like a hefty wage increase but it doesn't fully equal the purchasing power of the minimum wage in 1968 - which today would be closer to $11 per hour. The bill is really only allowing American workers a degree of "catch-up." Thus the name and theme around the bill: "Catching Up To 1968." Of course, the current federal minimum wage has been $7.25 per hour since 2007.
The Catching Up To 1968 Act of 2012 contains four basic elements:
It raises the minimum wage to $10.00 per hour;
The minimum wage is raised immediately - not gradually as in the past - beginning 60 days after the date of enactment; and
Beginning one year after the $10.00 per hour minimum wage takes effect, and each year thereafter, the minimum wage will be indexed in proportion to the increase in the Consumer Price Index (CPI).
For workers earning their living on the basis of tips, the cash wage paid to such an employee is to be 70% of the minimum wage when the law takes effect, but in no case less than $5.50 an hour, adjusted annually as necessary thereafter.
The bill will affect more than 30 million workers and give the economy an immediate boost by significantly increasing aggregate demand. Most economists that I've talked with said there was no economic reason to increase it incrementally over a couple of years.
Raising the federal minimum wage and indexing it to keep up with inflation has been supported historically by 70% of the American people. The AFL-CIO, National Council of La Raza, civil rights organizations, Ralph Nader, Senate Majority Leader Harry Reid and many others have all supported raising it and indexing it. Even Rick Santorum (until recently) and Mitt Romney believed in raising the minimum wage and Mr. Romney wanted to index it to inflation. If Mr. Romney had put it into effect during his time as Governor of Massachusetts it would now be around $10 per hour in that state.
$10 per hour at 40 hours per week is $400. $400 times 52 weeks equals $20,800 annually. As of 2010, the average income in the US per person was $40,584 (per capita personal income).
A $10 minimum wage, after years of windfall price increases and executive compensation windfalls at labor's expense, would annually pump tens of billions of dollars into greater consumer (or aggregate) demand by low-income families in this depressed economy.
The federal minimum wage, covered by the 1938 Fair Labor Standards Act (FLSA), operates as a floor. States and communities have the leeway to set higher livable wage standards and cover more workers - and a few do. Ten states have indexed the minimum wage to inflation.
Throughout the 1950s and 1960s the minimum wage represented nearly 50 percent of average wages for private-sector, non-supervisory workers. But in 2010, that figure had fallen to only 38 percent. The purchasing power of the minimum wage plummeted in the 1980s when Congress did not increase it from January 1981 to April 1990.
In 2007, Congress raised the federal minimum wage by $2.10 per hour--from $5.15 to $7.25 per hour--as a first step toward restoring its historical value, providing an additional $1.6 billion annually in increased wages. It's now time to complete the job and index it into the future.
Research has shown no job loss resulting from reasonable minimum wage increases, even when the economy is struggling. On the contrary, to fix the underlying weakness of our economy, we must boost aggregate demand and increase the purchasing power of millions of low-wage workers--and one proven and effective way of doing that is to raise the federal minimum wage.
In conclusion, I want to especially thank Ralph Nader for encouraging me to introduce this legislation. While he has not been able to secure the presidency, he has been right on the issues and for his vast contributions to the betterment of our country, every American should be grateful.