Making the Federal Minimum Wage a Living Wage

By Robert Pollin

The Democrats moved rapidly after taking control of congress to make good on their 2006 campaign promise to raise the federal minimum wage. The minimum wage is now scheduled to rise in three steps up to $7.25 an hour as of mid-2009. This is the first federal increase since 1997, when the $5.15 minimum was enacted.

In the November 2006 election, six states-- Arizona, Colorado, Missouri, Montana, Nevada, and Ohio--passed minimum wage increases with a 65 percent average level of support.

This means when the new federal minimum wage becomes law sometime in mid- 2007, twenty-nine states and the District of Columbia, representing nearly 70 percent of the total U.S. population, will already be operating with minimum wage standards above $5.15. Beyond this, more than 140 municipalities now operate under some version of a living wage law, with the living wage minimum generally set between nine and eleven dollars per hour. Voters throughout the United States clearly support the principle of living wage standards.

But do we really know what a reasonable "living wage" minimum is for the country today? And if such a figure were to be enacted into law, would it lead to job losses for low-wage workers, as critics persistently assert? These are the questions that move us usefully beyond the official Washington frame of reference that is culminating with the new $7.25 minimum.

This column draws in part from the forthcoming co-authored book, A Measure of Fairness: The Economics of Living Wages and Minimum Wages in the United States (Cornell University Press, 2007).

(New Labor Forum 16(2): 103-107, Spring 2007)