January 2007
Minimum Wage
When the Fair Labor Standards Act (FLSA) was enacted in 1938, the federal minimum wage was twentyfive cents per hour. Today, the federal minimum wage is $5.15 per hour. The FLSA sets a wage floor, or
a level that wages are not allowed to fall below. Workers are entitled to time-and-one-half for every hour
worked over 40 hours. Under the FLSA, certain categories of workers are exempt from the minimum
wage and overtime provisions. Child labor regulations prohibit persons younger than eighteen years old
from working in certain jobs and additionally set rules concerning the hours and times employees less
than sixteen years of age may work.
The minimum wage does not increase automatically and it is not adjusted for inflation. In order to raise
the federal minimum wage, the U.S. House of Representatives and Senate must pass a bill and the
President must sign it to amend the Fair Labor Standards Act. The most recent minimum wage increase
occurred nearly nine years ago. In August 1996 when President Bill Clinton signed into law an increase
lifting the minimum wage from $4.25 to $5.15 in September 1997. The impact of this increase on
employment opportunities, wages, and incomes of low-wage workers was overwhelmingly positive.
Approximately 10 million workers benefited from the increase. About 71% were adult, 58% were
women, and 46% worked full time. i If Congress were to increase the minimum wage this year, Women
and people of color would be the primary beneficiaries of the increase.
Many states also have minimum wage laws. Twenty-nine states and the District of Columbia pay more
than the federal minimum wage. These states include: Alaska, Arizona, Arkansas, California, Colorado,
Connecticut, Delaware, Florida, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota,
Missouri, Montana, Nevada, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode
Island, Vermont, Washington, Wisconsin and West Virginia. Seventeen states have laws that set the
minimum wage at the federal level. These states include: Georgia, Idaho, Indiana, Iowa, Kentucky,
Nebraska, New Hampshire, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, Utah, Virginia,
and Wyoming. Kansas is the only state that has lower minimum wage rates than the federal limit, with
$2.65 per hour, while five states (Alabama, Louisiana, Mississippi, South Carolina, and Tennessee) have
no laws governing minimum wage. However, in cases where the state and federal minimum wage differ,
the employee is entitled to the higher of the two minimum wages. ii
YWCA POSITION ON THE MINIMUM WAGE
The YWCA adamantly supports legislation to raise the federal minimum wage as 60% of the minimum
wage earners are women and more than 40% are people of color. An increase in the minimum wage is
one policy strategy to narrow the gender and minority wage gaps.
The YWCA supports initiatives to increase the income of women, including policies that raise the
minimum wage, protect overtime, strengthen equal pay, maintain the earned income tax credit, oppose the
privatization of Social Security, and expand non-traditional training for women from all socioeconomic
and racial backgrounds.
YWCA USA*1015 18th Street, N.W.*Suite 1100 *Washington DC 20036*www.ywca.org
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FACTS
• The minimum wage is a women’s issue. 60.6% of workers who would benefit from a minimum wage
increase to $7.25 by 2007 are women.
•
The minimum wage is a civil rights issue. People of color would especially benefit from a minimum
wage increase. African Americans represent 11.1% of the total workforce, but are 15.3% of workers
who would benefit from an increase, while similarly, 13.4% of the total workforce is Hispanic, yet
Hispanics are 19.7% of the workers who would be positively affected by an increase. iii
•
The minimum wage is a family issue. Nearly 10 million children live in households that would gain
from a minimum wage increase. iv
•
Every year that Congress fails to raise the minimum wage, families slip further into poverty. Workers
who earn $5.15 an hour working 40 hours a week, 52 weeks a year, earn $10,712 per year, or $9,288
below the 2006 poverty line for a family of four and $5,888 below the poverty line for a family of
three. v
•
Raising the minimum wage would help women, girls and their families afford basic necessities
including food and housing. A $2.10 increase would add over $4,300 a year for a full time worker
who makes the minimum wage. This money could help them to purchase groceries, medicine, and
clothing or even expand housing, education, and child care options.
•
Women who are transitioning from welfare to work would benefit from an increase in the minimum
wage. For example, a study that examined the impacts of Oregon’s state minimum wage increase in
1999 revealed that moderate increases in the minimum wage helped former welfare recipients and
low-wage workers without creating job losses. vi In fact, Oregon’s minimum wage increase boosted
the wages of as many as half of the welfare recipients who entered the workforce. vii
•
Many low-income women and their families would benefit from an increase in the minimum wage.
According to the Economic Policy Institute, 8.2 million workers or 6.5% of the workforce earning up
to a dollar above the minimum would likely benefit from an increase, a disproportionate number of
whom are women and people of color. viii
RESOURCES
Economic Policy Institute: http://www.epinet.org/
i Bernstein,
ii
Jared and John Schmitt. (1998) Making Work Pay: The Impact of the 1996-1997 Minimum Wage Increase. http://www.epinet.org/content.cfm/studies_stmwp
United States Department of Labor. (January 2006) Minimum Wage Laws in the States. http://www.dol.gov/esa/minwage/america.htm. The Center for American Progress. (
Economic Policy Institute. (January 2006) Minimum Wage Facts At A Glance. http://epinet.org/content.cfm/issueguides_minwage_minwagefacts
iv Children’s Defense Fund. (May 2005) Increasing the Minimum Wage: An Issue of Children’s Well-Being. http://www.childrensdefense.org/familyincome/jobs/minimumwagereport2005.pdf
v
United States Department of Health and Human Services. (March 2006) The 2006 HHS Poverty Guidelines. http://aspe.hhs.gov/poverty/06poverty.shtml
vi Thompson, Jeff. (1999) Oregon’s Increasing Minimum Wage Brings Raises to Former Welfare Recipients and Other Low Wage Workers Without Job Losses.
Oregon Center for Public Policy. http://ocpp.org/1999/rpt990602.pdf
vii Thompson, Jeff and Charles Sheketoff. (2001) Getting the Raise They Deserved: The Success of Oregon’s Minimum Wage and the Need for Reform. Oregon
Center for Public Policy. http://ocpp.org/2001/rpt010312mw.pdf
viii Economic Policy Institute. (January 2006) Minimum Wage Issue Guide: Facts At A Glance. http://epinet.org/content.cfm/issueguides_minwage_minwagefacts
iii
YWCA USA*1015 18th Street, N.W.*Suite 1100 *Washington DC 20036*www.ywca.org
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YWCA USA*1015 18th Street, N.W.*Suite 1100 *Washington DC 20036*www.ywca.org
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