Senate Democrats Poised to Act on Minimum Wage

April 27th 2015

Sarah Gray

On Thursday, Senate Democrats led by Sen. Patty Murray (D-Wash.) are poised to introduce a bill to raise the minimum wage from $7.25 to $12 an hour by the year 2020. The Raise The Wage Act would lift wages for nearly 38 million Americans, it would create mandatory raises, and it would also address the sub-minimum wage for tipped workers. High profile Senate Democrats including Minority Leader Harry Reid (D-Nev.) and his potential successor Sen. Charles Schumer (D-N.Y.) have signed on as co-sponsors.

The legislation, which is being championed by Congressman Robert C. Scott (D-Va.) in the House of Representatives, has little chance of passing in the Republican controlled congress. However, it does renew the call for a higher wage -- and sets it nearly two dollars higher than the $10.10 was suggested by President Obama in his 2014 State of the Union Address.

This bill also brings the minimum wage to the forefront of the 2016 elections. If the bill does not pass, the potentially partisan vote could provide a good talking-point for Democrats who can point out that they voted for a wage hike.

“The politics, substance and morality coincide to make it a winner issue for us in 2016,” Senator Schumer told the New York Times. Pointing out that the issue doesn't just appeal to low-wage workers. "Polling data shows it appeals to middle-class people, people of high income," Schumer continued.

Despite the fact that this minimum wage is unlikely to pass, raising minimum wage has bipartisan voter support. A 2014 Pew Research Center study found that 53 percent of Republicans support a minimum wage hike to $10.10, and 90 percent of Democrats support it. (Overall 73 percent of respondents said they supported a minimum wage raise from $7.25 to $10.10.)

The minimum wage was established under President Franklin D. Roosevelt, who signed the Fair Labor Standards Act in 1938. This bill set wages at 25 cents an hour, which equated to 10 per week for a 40 hour work week.

Since then the minimum wage has vacillated in its purchasing power, and for most of the 1950's, 1960's, and 1970's, the minimum wage commanded enough purchasing power to keep a family of three above the poverty line. (A point Elizabeth Warren made during an appearance on "Conan.")

In 1968 the minimum wage hit its peak purchasing power -- at $1.60 per hour. The current equivalent is $10.75.

Today's minimum wage was last raised in 2009, though at $7.25 an hour this wage hasn't kept pace with inflation or productivity. That means if you work 40 hours per week, 52 weeks per year, your annual income is only $15,080. This is below the federal poverty line for families of just two.

Though the proposed $12 minimum wage hike is three dollars shy of what groups like the Fight for $15 are demanding, according to the Economic Policy Institute (EPI) the $12 wage will still make a positive impact and it is "economically sustainable."

A $12 minimum wage would raise the hourly rates of 21.1 million women (or 32 percent of women who make the minimum wage), and 16.6 million working men. It would also greatly impact wage-earning African Americans and Hispanics, raising the wages for 37 percent and 40 percent of workers respectively. Over a quarter of working parents (27.6 percent of workers) would see their wages rise -- and nearly a quarter of children (24 percent) have at least one parent who would receive raised wages due to this legislation.

Another added bonus: boosting the economy, especially Main Street. EPI estimates that an increased wage would add billions into the economy, as low-wage workers are more likely to purchase basic needs locally.

Critics of the minimum wage worry that hikes in raises will lead to job loss, as businesses will have to spend more money on labor. They also argue that it is mostly high school workers who would benefit from such a raise. ATTN: has addressed some of these concerns in the video below: