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A Publix supermarket cashier. A 2019 Oxfam report shows that raising the minimum wage to $15/hr would benefit 40 million workers and their families. (Photo by: Jeffrey Greenberg/UIG via Getty Images)

A Publix supermarket cashier. A 2019 Oxfam report shows that raising the minimum wage to $15/hr would benefit 40 million workers and their families. (Photo by: Jeffrey Greenberg/UIG via Getty Images)

Top Reasons It's Time to Raise the Minimum Wage Now

When employers don’t pay people enough to survive, those workers are compelled to seek government assistance, meaning taxpayers are essentially subsidizing the corporations. 

Mary Babic

 by Oxfam America

The federal minimum wage—just $7.25 an hour—hasn’t been increased in more than a decade.

It’s time to raise the minimum wage. Today, millions of Americans do arduous work in jobs that pay too little and offer too few benefits. They serve food, clean offices, care for the young and elderly, stock shelves, and deliver pizza. They work these jobs year after year while caring for children and parents, trying to save for college, and paying their bills.

We need to get our economy moving, prioritizing workers and families most impacted by the pandemic, specifically women and people of color.

But despite their best efforts, these low-wage and essential workers are falling further and further behind. The COVID-19 crisis has put them even more at risk, and the federal minimum wage of $7.25/hr is locking millions—most notably women of color and single parents—in poverty.

The way we see it, if you work hard, you should earn enough to get by. That’s why new efforts by the Biden administration and Congress to raise the federal minimum wage to $15 to help Americans recover from COVID-19 are so important.

Here are six simple reasons why raising the minimum wage makes sense.

1. It is long overdue

Since it was last raised in 2009, the minimum wage has failed to keep up with inflation, failed to keep up with average wages, and—most dramatically—failed to keep up with incomes of the top 1 percent and CEOs, contributing to America’s growing inequality crisis.

As a result, low-wage workers are not benefiting from economic growth and productivity. If the minimum wage had kept pace with productivity increases, it would be around $24/hr according to the Center for Economic and Policy Research. Just 30 years ago, the average pay gap between CEOs and workers was 59 to 1; by 2018, it had soared to 361 to 1. The average CEO at one of the top 350 firms in the US made $21.3 million in 2019, 320 times as much as the typical worker; a minimum wage worker still makes $15,080: a gap of 1,400 to 1.

2. It would address longstanding racial and gender inequities

Historically marginalized people, who do more than their fair share of low-wage work, would stand to benefit disproportionately from the bump. (For dramatic illustration of the disparate impact of a raise, refer to Oxfam’s map of low-wage workers in the US.)

According to the data from the Economic Policy Institute, while 27 percent of the total US workforce would benefit from the raise:

  • 39 percent of Black and Latina women would benefit (vs. 18 percent of white men);
  • 38 percent of African American workers would benefit;
  • 33 percent of Latino workers would benefit; and
  • 32 percent of women workers would benefit (vs 22 percent of men).

3. It would reduce poverty

The bump from $290 a week to $600 a week would lift millions of families out of poverty. More than a quarter of the workforce—40 million workers—would see a raise in wages.

The pandemic has made this move even more urgent, as millions have slipped into poverty over the past year, and 11 percent of adults are now facing food insecurity.

4. It would fuel economic growth

The roughly $120 billion extra paid to workers would be pumped back into the economy for necessities such as rent, food, and clothes. Economists have long recognized that boosting purchasing power by putting money in people’s pockets for consumer spending has positive ripple effects on the entire economy.

In one recent poll, 67 percent of small business owners support the minimum wage increase to $15 an hour. They say it would spark consumer demand, which would enable them to retain or hire new employees.

And raising the wage doesn’t seem to compel employers to cut jobs. As states and cities across the country have raised wages, research has found no statistically significant effect on employment.

5. It would save taxpayer money and reduce use of government programs

When employers don’t pay people enough to survive, those workers are compelled to seek government assistance, meaning taxpayers are essentially subsidizing the corporations. 

In 2016, the Economic Policy Institute found that, among recipients of public assistance, most work or have a family member who works; and they are concentrated at the bottom of the pay scale. Raising wages for low-wage workers would “unambiguously reduce net spending on public assistance, particularly among workers likely to be affected by a federal minimum-wage increase.”

6. It’s what the vast majority of Americans want

Vast majorities (up to three quarters, including a majority across party lines) support raising the wage. In fact, over half the states have raised their minimum wages to restore basic fairness to the workforce.

All work has dignity and worth. We need to get our economy moving, prioritizing workers and families most impacted by the pandemic, specifically women and people of color. After more than a decade of hard work, low-wage workers deserve a bump to get them and their families out of poverty. 


© 2021 Oxfam America

Mary Babic

Mary Babic is Senior Communications Officer, Oxfam America

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