Georgetown Center on Poverty and Inequality Releases Report on Minimum Wage

October 2, 2014 —

Raising the minimum wage is an important civil and human rights issue according to a new report by Georgetown University’s Center on Poverty and Inequality and the Leadership Conference Education Fund. The report, “Improving Wages, Improving Lives: Why Raising the Minimum Wage is a Civil and Human Rights Issue,” finds that the current national hourly minimum wage, last raised in 2009 to $7.25 an hour, is low by historical standards and is inadequate for meeting the basic expenses faced by working families.

“This report is timely and significant.  Referenda on minimum wage increases are on the ballot in numerous states this fall, and there is still time for congressional action before the end of the year.  The time is now and the importance is critical,” said Georgetown Law Professor Peter Edelman, faculty director of the Georgetown Center on Poverty and Inequality.  “A fair minimum wage is the human right of every worker, but this report makes crystal clear that it is a crucial civil rights issue as well.”

Key findings and recommendations include: 

 • The minimum wage today is too low to keep working families out of poverty and affords people less today than it did at the time of the 1963 March on Washington. The national minimum wage has been pushed down from about half of average wages, a key indicator of living standards in the U.S., in the 1960s to just over one-third of average wages today.

 • The subminimum wage that employers are required to pay tipped workers – the "tipped minimum wage" – has been frozen at just $2.13 an hour for nearly a quarter-century, opening up the largest gap in history between the minimum wage and the subminimum wage for tipped workers. While the law requires that tips be sufficient to raise wages for tipped workers to the standard minimum wage, the reality often falls short of this goal, fueling markedly higher poverty and instability for these workers.

 • Proposals to raise the minimum wage and subminimum wage for tipped workers would raise wages for a large share of low-paid workers, including a disproportionate share of African-Americans, Latinos, women, LGBT individuals and other disadvantaged workers.

 • The minimum wage is increasingly relevant for the well-being of low-wage workers’ families, as those likely to be affected by the minimum wage are significantly older and more educated than before, and contribute far more to their families’ income (50 percent on average) than often perceived.

 • The choice by policymakers to keep the minimum wage low has been an important factor contributing to the dramatic and troubling rise in income inequality since the 1970s. Raising the minimum wage and subminimum wage for tipped workers would help reduce poverty (including child poverty) and lessen the gender wage gap, especially for women of color.

 • States and localities across the country have acknowledged the problem and begun to raise state and local minimum wages. But millions of other individ¬uals, families, and communities are waiting for Congress to act.

• The most exhaustive review of research on the impacts of the minimum wage finds that, on balance, impacts on employment are “both statistically insignificant and very close to zero, even when restricting the focus to teenagers and young adults.”

“Low-wage workers are disproportionately people of color and women of all races and ethnicities (especially single mothers),” said Edelman. “The impact of the minimum wage is just one example of the structural discrimination that all of us need to address.  The minimum wage does not single out people of color and women for injury, but its effect is just as powerful.” 

The report provides an overview of the current minimum wage, including the subminimum wage for tipped workers; examines the minimum wage’s importance to the civil rights movement during the past half-century; summarizes relevant research on the potential impacts of raising the minimum wage today; and describes the state, local and federal momentum toward raising the minimum wage. 

The report was principally authored by Indivar Dutta-Gupta of the Georgetown Center on Poverty and Inequality. 

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