Minimum Wage

Federal legislation, scheduled to be introduced this week, would raise the current federal minimum wage by a modest 50 cents a year for each of the next two years. The Jewish Council for Public Affairs (JCPA) supports adoption of this legislation which would restore buying power to minimum wage workers who have seen their purchasing power fall 30 percent in the last 30 years. Further, the JCPA would support and will advocate for the concept of linking the minimum wage to the annual Consumer Price Index to address the ongoing need to sustain a flexible, realistic minimum wage level, reflective of changing economic conditions.

Since passage of the Fair Labor Standards Act of 1938, which established a minimum wage and required Congressional approval for each increase, minimum wage increases have generally failed to keep pace with the rise in consumer prices. Erosion in the real value of the minimum wage has had a serious impact on the standard of living of the working poor. Moreover, erosion in wages of low-wage workers has been a major factor underlying persistent poverty and a steadily widening income gap. The current $5.15 per hour minimum wage, incorporating a 90-cent increase in 1996-1997, still leaves the income of a full-time, year round minimum wage worker insufficient to sustain a family of three above the poverty level. Recognizing the correlation between low wages and sustained poverty, the Jewish Council for Public Affairs has long supported efforts to raise the federal minimum wage to levels above the poverty line.

Contrary to charges by opponents of an increase, recent studies have found that a moderate rise in the minimum wage does not reduce employment opportunities or harm small businesses. Economic conditions, not moderate minimum wage increases, determine the level of unemployment, these studies have shown. Further, over 70 percent of minimum wage workers are adults, contrary to assertions by opponents that most minimum wage workers are teens. Forty percent of the last increase went to families in the bottom 20 percent of the income scale, workers who earn on average $14,000 a year.

The JCPA has long maintained that the federal government has a primary responsibility for alleviating poverty and for ensuring conditions that allow families to move from poverty to economic self-sufficiency. This includes the guarantee of a minimum wage sufficient to allow families to support themselves. The JCPA believes that the promise of America, and the demand for a decent family life for all, requires prompt passage of legislation to raise the minimum wage.

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