Raising the Floor: The Minimum Wage and Low-Wage Workers

Recent work by colleagues at the National Employment Law Project and the Center for Economic and Policy Research point to the importance of the minimum wage to the security of low-wage workers and to economic recovery. Nicole Woo’s op-ed in Friday’s USA News & World Report pulls together a number of threads of CEPR’s recent work–including the inflationary erosion of the minimum, the simultaneous spike in key family expenses (such as health insurance or higher education, and the rising educational attainment of low-wage workers.  NELP’s data brief, Big Business, Corporate Profits, and the Minimum Wage, reminds us that most minimum wage workers are adults toiling for large employers–most of whom (think Walmart or MacDonalds) are counting impressive post-recession profits.

This graph plots the wages of low-wage (10th percentile) workers in Iowa since 1979, and underscores the importance of the minimum wage as a floor for low-wage work.  Wages at the 10th percentile rise and fall with the minimum–with the sole exception of the economic boom at the end of the 1990s, when tight labor markets brought wage gains without an increase in the statutory minimum.

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