In an effort to help working families and strengthen our economy, U.S. Senator Jack Reed (D-RI) today joined Senator Tom Harkin (D-IA) as an original cosponsor in introducing the Fair Minimum Wage Act of 2013 to raise the federal minimum wage.
The current federal minimum wage is $7.25 an hour and has not been raised since 2009. The Fair Minimum Wage Act, introduced today in both the Senate and U.S. House of Representatives, would incrementally boost the national minimum wage with three annual 95-cent increases until it reached a rate of $10.10 an hour by 2015. At that point, the bill would ensure the minimum wage would be indexed to inflation to keep minimum wage workers in step with the economy.
"This is a smart, three-year phased approach to improve wages. Raising the minimum wage is vital because too many people have been left out of the economic recovery. Strong productivity has translated into higher profits for companies, but not more take-home pay for employees. The stagnation of earnings in the face of soaring prices for gasoline, home heating, and health care is squeezing the middle-class," said Senator Reed. "The minimum wage is an important policy tool that lets low-income families lift themselves out of financial hardship. Raising the federal minimum-wage will contribute to the economic well-being of millions of middle- and lower-income families."
The minimum wage has lost more than 30 percent of its buying power since its peak in 1968. If the minimum wage had kept up with inflation since 1968, it would be worth more than $10.50 per hour today.
Reed noted that while productivity and the stock market are up, stagnating incomes and the increased cost of living are squeezing working families. And inflation-adjusted average income is still about 8 percent lower than it was in 2007.
On January 1, 2013, Rhode Island increased the state's minimum wage 35-cents to $7.75 an hour, raising wages for an estimated 29,000 low-wage workers in the state.
The Fair Minimum Wage Act would also increase the minimum wage for tipped workers over a longer period of time at annual 95-cent increases, from $2.13 per hour to an adjusted level equal to 70 percent of the regular minimum wage.
The current federal minimum wage of $7.25 per hour translates to about $15,080 per year for a full-time worker, and the federal minimum wage for tipped workers -- $2.13 per hour -- has not increased in more than 20 years. In his State of the Union address, President Obama proposed a plan to boost federal minimum wage from $7.25 an hour, to $9.
A 2012 report by the National Employment Law Project found that 66 percent of low-wage employees work for large companies, not small businesses, and that more than 70 percent of the biggest low-wage employers have fully recovered from the recession and are enjoying strong profits.