Developing strategies to end hunger

Fourteen States Raise the Minimum Wage in 2014

Hunger Report Monday 2

Minimum wage increases are coming to 14 states in the New Year. Together they are expected to improve the livelihoods of more than 4.5 million people, according to a recent report by the Economic Policy Institute. Last year, legislators in Connecticut, New York, Rhode Island, and California, and voters in New Jersey, all acted to raise their respective state minimum wage rates to between $8.00 and $9.00 per hour, to take effect in 2014. In addition, minimum wages in nine other states – Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont, and Washington – increased automatically because they are indexed to inflation rates, a policy that ensures that the minimum wage keeps pace with the rising cost of living.

The current minimum wage, $7.25 an hour, is far from enough to ensure food security for a family of four. As the infographic below illustrates, wage rates since the 1970s have not kept up with growing productivity in the U.S. economy:

Despite wage improvements in 14 states this year, the minimum wage in every state remains insufficient to keep a family out of poverty. A family of four with a full-time minimum-wage worker who is eligible for both the Earned Income Tax Credit and Child Tax Credit still has 13 percent less than a poverty-level income. The 2014 Hunger Report proposes raising the federal minimum wage to $12 an hour because it is the minimum hourly wage at which a single breadwinner in a family of four, working full-time, year-round, can pull her or his family just over the federal poverty line. Currently, about a third of all workers earn less than $12 per hour.

There is no schedule for indexing the federal minimum wage to inflation as it is in the nine states mentioned above; it is subject to the whims of the president and Congress. If the minimum wage had kept pace with inflation since 1968, it would be $10.60 instead of $7.25. Had it kept pace with productivity growth, the minimum wage today would be $18.67. That sounds incredibly high, but the reason it sounds so extravagant is simply that wages have not kept pace with productivity for all these years. Poverty-level wages have become the new normal in America.

Like the 14 states that took action last year, Congress should raise the minimum wage so that a full-time, year-round worker in every state can support a family of four above the poverty line. 

Last month, Hunger Report Senior Editor Todd Post responded point by point to the most commonly-heard arguments against raising the minimum wage. For more information on the minimum wage  and its impact on people facing hunger, read his post and chapter one of the 2014 Hunger Report, Ending Hunger in America.

Derek Schwabe


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