WASHINGTON – Relatively few Americans — less than 5 per cent of hourly workers — toil for the minimum wage today.
Yet President Barack Obama’s push to offset decades of inflation by raising the minimum wage to $10.10 an hour would ripple through the economy and touch the lives of millions more workers and their families. Republicans say some of those in need would be harmed, not helped.
Here are some questions and answers about Obama’s proposal:
Q: How much is the U.S. minimum wage now?
A: It’s $7.25 an hour, or about $15,000 per year for full-time work. For a worker supporting a family of two, that falls just below the federal poverty line.
A minimum wage of $10.10 would mean earning about $21,000 per year.
Q: How many Americans work for minimum wage?
A: About 1.6 million, according to the U.S. Bureau of Labor Statistics. They are a smaller share of the workforce than in previous decades.
Another 2 million people are paid even less, because of various exceptions in the law. Many are waiters, bellhops and others whose wages are augmented by tips from customers. Their minimum is lower — $2.13 an hour — and hasn’t gone up for more than two decades. Obama supports boosting the minimum for tipped workers to $7.07.
Together, both groups make up 4.7 per cent of workers paid by the hour, and even less of the workforce when salaried workers are included.
Q: Are these the only workers who would get a boost from Obama’s plan?
A: No. Millions more people who earn less than $10.10 an hour would get an automatic raise. Many of them work in states that have imposed a minimum wage that’s higher than the current federal one.
And some people who already make more than $10.10 would get raises, too, as businesses adjusted their pay scales upward.
Democratic lawmakers pushing for the increase predict it would lead to raises for some 30 million people. Republican opponents counter that it could force companies to reduce hiring or even lay off some workers.
Q: How many states have a minimum wage higher than the federal one?
A: Twenty-one states, plus the District of Columbia, according to the National Conference of State Legislatures.
None is as high as the wage Obama seeks. Washington state’s is highest at $9.32 an hour, adjusted annually for inflation. California’s minimum wage is set to climb to $10 in 2016.
State lawmakers aren’t waiting for a divided Congress to act. Democratic legislators are pushing minimum-wage increases in more than half of the states this year, although several are political longshots.
Q: Who makes minimum wage?
A: Most are workers in part-time jobs. They tend to be in the service industry, especially in restaurant and sales jobs.
Most are adults. But teens and young people make up a disproportionately large share: half of minimum-wage workers are under age 25.
Nearly three-quarters have a high school degree or more education. More than three-quarters are white.
Nearly 2 out of 3 are female.
Q: Where did the minimum wage come from?
A: It started at 25 cents per hour in the 1938 Fair Labor Standards Act. Since then, Congress has raised it 22 times. Its value peaked in the 1960s, but the wage hasn’t kept up with inflation since then.
The last increase was in 2007, during the presidency of George W. Bush. It was phased in to reach $7.25 in 2009.
Obama wants the wage to be indexed to inflation, so it would rise automatically in the future.
Q: Why not raise the minimum wage?
Q: Many congressional Republicans and other opponents say that would dampen hiring or even spark layoffs at a time when the nation is struggling with high unemployment. They argue that much of the cost would be passed along to consumers as higher prices. And they say it isn’t an efficient way to help the poor, because many people earning the minimum wage are part of a middle-class or higher-earning households.
House Speaker John Boehner said Obama’s proposal could lead to job-cutting and discourage companies from adding entry-level positions that he said were needed especially by minorities trying to start up the economic ladder.
“It’s bad policy, and it will hurt the very people the president purports to want to help,” he said Tuesday.
Q: So what do Obama and Democratic supporters say?
A: They say that raising the minimum wage would boost the economy and create jobs, because cash-strapped workers tend to spend any extra money that comes in. Supporters argue that boosting low wages would help narrow the gap between the nation’s poorest and richest families. And they say full-time workers with families shouldn’t have to live in poverty.
“Today, the federal minimum wage is worth about 20 per cent less than it was when Ronald Reagan first stood here,” Obama said in his State of the Union speech. He urged Congress to “give America a raise.”
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