Congressman Charles B. Rangel, Representing New York's 15th District
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The Value of the Minimum Wage Increase

Congressman Charles Rangel exhorts the crowd at a Washington rally celebrating the increase of the minimum wage.(Front Standing, L-R) Speaker Nancy Pelosi, Sen. Dick Durbin, Rep. Barbara Lee, and Rep. Steny Hoyer.

Congressman Charles Rangel exhorts the crowd at a Washington rally celebrating the increase of the minimum wage. (Front Standing, L-R) Speaker Nancy Pelosi, Sen. Dick Durbin, Rep. Barbara Lee, and Rep. Steny Hoyer.

Democrats are building an economic approach that lifts every American, not just the privileged few. The average American CEO earns more before lunchtime in one day than a minimum wage worker earns all year. This is not the kind of America we want our children to grow up in. This month, Americans get a long-awaited pay raise.

On July 24th, the first federal pay raise for working Americans in almost 10 years goes into effect. This raise is part of our New Direction towards shared prosperity, and is a down payment on a broader American agenda for working families.

It is wrong to have millions of Americans working full-time and year-round, yet still living in poverty. The current federal minimum wage of $5.15 an hour is simply not enough to cover the needs of the average family as they struggle with increasing costs of child care, education, health insurance, and gasoline prices. The value of the minimum wage has dropped to its lowest level in over half a century and while the federal minimum wage for American workers has not increased since 1997.(What has? See the chart below.)

Working full time, a minimum wage worker brings home only $10,712 a year, nearly $6,000 below the poverty level for a family of three. Raising the minimum wage this month means a $4,400 yearly pay raise—money that could pay for 15 months of groceries, or more than two years of health care. It could buy 19 months of utilities, 20 months of child care, or 30 months of college tuition at a public, 2-year college.

Over the next two years, the minimum wage will increase from $5.15 an hour to $7.25 per hour. Thanks to this increase, in 2009 a family of four will move from 11 percent below the poverty line to 5 percent above the poverty line. Nearly 13 million Americans will benefit from the increase.

The minimum wage increase will have a direct positive impact for:

Women. Almost 60 percent of the 13 million workers who will benefit from a minimum wage increase are women.

Minorities. Forty percent of those who will benefit are people of color.

Families. Of the workers who will get a raise, 3.4 million are parents and 6.4 million children will see their parents’ income rise. Families with affected workers rely on those workers for more than half of their family’s income.

Military Families. Ten percent of military spouses earn between $5.15 and $7.25 per hour. 50,000 military families will benefit from an increase in the minimum wage to $7.25 per hour.

Raising the minimum wage is essential to the security of America’s families and children. The new Democratic-led Congress is delivering on our priorities for working families through the minimum wage increase; it is an initial step towards our broader agenda that prioritizes working Americans.

Learn more about the minimum wage increase from the Education and Labor Committee>>

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