Minimum Wage
February 2006
In the more than eight years since Congress passed the last increase, the buying power of the minimum wage has eroded and is currently at its second-lowest value since 1955. The value of the current minimum wage, adjusted for inflation, is less than one-third the average non-supervisory wage. Advocates for low wage workers need to convince Congress that providing a raise for low income workers would not only help them make ends meet but would also advance the economic recovery.
- $5.15 an hour is not a livable wage:
A single earner working full time at the current minimum wage earns only $10,700 per year--nearly $5,000 below the poverty line for a family of three.
According to the U.S. Department of Labor, about 40 percent of the workers who would benefit from an increase in the minimum wage are the sole wage earners in their households. Minimum wage workers not only prepare and serve our food at local restaurants; they take care of our children, our parents and our grandparents. They should be able to provide for their own families as well.
- An increase in the minimum wage would positively affect nearly 8.2 million of low-wage workers:
According to one study, 7.3 million workers (5.8 percent of the workforce) would directly benefit from an increase in the minimum wage. Moreover, because employers often like to maintain wage differentials between entry level workers and those who are more experienced, nearly a million more workers who already make more than the new minimum wage would also benefit from the increase.
- An increase in the minimum wage would disproportionately benefit women, minorities, and the nation's poor:
Women are the largest group of beneficiaries from a minimum wage increase: 60.6% of workers who would benefit from an increase to $7.25 by 2007 are women. An estimated 7.3% of working women would benefit directly from that increase in the minimum wage.
A disproportionate share of minorities would benefit from a minimum wage increase. African Americans represent 11.1% of the total workforce, but are 15.3% of workers affected by an increase. Similarly, 13.4% of the total workforce is Hispanic, but Hispanics are 19.7% of workers affected by an increase.
The benefits of the increase disproportionately help those working households at the bottom of the income scale. Although households in the bottom 20% received only 5.1% of national income, 38.1% of the benefits of a minimum wage increase to $7.25 would go to these workers. The majority of the benefits (58.5%) of an increase would go to families with working, prime-aged adults in the bottom 40% of the income distribution.
Among families with children and a low-wage worker affected by a minimum wage increase to $7.25, the affected worker contributes, on average, half of the family's earnings. Thirty-six percent of such workers actually contribute 100% of their family's earnings.
Relatively large shares of the workforce (up to 11.7%) in some Southern and Western states would benefit from an increase to $7.25.
- An increase in the minimum wage will not increase joblessness:
opponents of the minimum wage often argue that it increases unemployment for entry level workers, thereby hurting the very people it is meant to help.
History clearly shows that raising the minimum wage has not negatively impacted the economy. In the four years after the last minimum wage increase passed, the economy experienced its strongest growth in over three decades. Nearly 11 million new jobs were added, at a pace of 232,000 per month. There were ten million new service industry jobs, including more than one and a half million retail jobs, of which nearly 600,000 were restaurant jobs.
Work has a special place in Catholic social thought: work is more than just a job; it is a reflection of our human dignity, and a way to contribute to the common good. Most importantly, it is the ordinary way people meet their material needs and community obligations. In Catholic teaching, the principle of a living wage is integral to our understanding of human work. Wages must be adequate for workers to provide for themselves and their families in dignity. Although the minimum wage is not a living wage, the Catholic bishops have supported increasing the minimum wage over the decades. The minimum wage needs to be raised to help restore its purchasing power, not just for the goods and services one can buy but for the self-esteem and self-worth it affords the worker. The United States Conference of Catholic Bishops supports legislation that would increase the minimum wage and is urging Congress to raise the minimum wage in a timely and meaningful way.
Urge Members of Congress to increase the minimum wage. Watch the USCCB/SDWP website and ALERT on Minimum Wage activity in the 109th Congress.
United States Conference of Catholic Bishops. . Washington, D.C., United States Conference of Catholic Bishops. “A Catholic Framework for Economic Life,” Washington, D.C., 1996.
Ryan, John A. Economic Justice: Selections from Distributive Justice and A Living Wage. Edited by Harlan R. Beckley. Louisville: Westminister John Knox Press, 1996.
Website http://www.usccb.org/sdwp
Thomas Shellabarger at the USCCB, 202.541.3189, tshellabarger@usccb.org