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Background
In the current climate, Congress needs to be convinced that providing a raise for low income workers would aid the economic recovery. Since the minimum wage was raised in 1997 to its current $5.15 per hour, it has lost some 12% of its buying power. If the minimum wage were to retain the buying power of the $1.60 standard of 1968, it would have to be raised to $8.24!
Four Reasons To Increase The Minimum Wage:
- $5.15 an hour is not a livable wage: A single earner working full time on the current minimum wage earns only $10,712 per year--nearly $4,000 below the poverty line for a family of three.
- An increase in the minimum wage would positively affect nearly 9 million of low-wage workers: According to the Economic Policy Institute (EPI), 6.9 million workers (5.8 percent of the workforce) would directly benefit from an increase in the minimum wage to $6.65 per hour in 2003. Moreover, because employers often like to maintain wage differentials between entry-level workers and those who have advanced beyond entry-level status, several million more workers who already make more than the new minimum wage would still benefit from the increase.
- An increase in the minimum wage would disproportionately benefit women, minorities, and the nation's poor: A 1998 EPI study found that households in the bottom 20 percent of the income spectrum, who receive only 5 percent of total family income ($15,728 per year, on average), received 35 percent of the total benefits of the last increase in the minimum wage.
- 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. Numerous empirical studies, however, have found that the minimum wage has had little or no effect on job levels. When Princeton economists David Card and Alan Krueger studied the impact of a minimum wage increase in New Jersey on fast food workers in the early 1990s, they found that employment actually increased. Moreover, Card and Krueger found that higher wages resulted in better-motivated, more stable workers with higher productivity levels and lower turnover rates. Additional empirical analyses by other economists have produced similar results. The widespread evidence prompted Robert Solow, an MIT Nobel Laureate, to write in a 1995 New York Times article that the "main thing about the research is that the evidence of the job loss is weak.... And the fact that the evidence is weak suggests the impact on jobs is small."
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.
Most of those affected by the last minimum wage increase (72 percent) were adults aged 20 and over, and more than half of all teenagers earning the minimum wage are in households with below-average incomes. An increase in the minimum wage would disproportionately benefit African Americans and Hispanics, and almost 60 percent of the benefits would go to women.
USCCB Position
Work has a special place in Catholic social thought: it is more than just a job, it is a reflection of our human dignity, and a way to contribute to the common good. Most important, 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. Because 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.
Action
Urge Members of Congress to cosponsor and support S. 20, The Fair Minimum Way Act of 2003. This bill would increase the minimum wage to $6.65 in increments of $.75; $5.90 an hour beginning 60 days after enactment and $6.65 an hour a year after that.
Resources
United States Conference of Catholic Bishops. Economic Justice for All. Washington, D.C., 1984.
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.
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More Information
Thomas Shellabarger at the USCCB, 202.541.3189, tshellabarger@usccb.org