Minimum Wage Workers Earn 21 Percent Less Than Their Counterparts 12 Years Ago: Report
Minimum wage workers today are effectively making 21 percent less than their counterparts did 12 years ago—the last time the federal government raised the wage.
A new report published Thursday by the Economic Policy Institute (EPI) found the $7.25 minimum wage has lost roughly one-fifth of its value since July 2009, after adjusting for inflation.
The value of minimum wage in 2009 would be equivalent to $9.17 per hour today. Minimum wage hit its peak in 1986, according to EPI, as it would be worth $11.12 in today's dollars.
"That's a really remarkable finding, that more than 50 years ago we paid the lowest wage workers in this economy substantially more than what we pay them today," Ben Zipperer, an economist at EPI, told Newsweek.
"Maybe the minimum wage hasn't changed, but the cost of living has increased over that period," Zipperer added. "It's more expensive to pay rent, it's more expensive to buy food and it's more expensive to pay for healthcare."
Today, there is no state, county or city in the U.S. where a minimum-wage employee working 40 hours per week can afford a two-bedroom rental. The study, from the National Low Income Housing Coalition, found a full-time worker can afford a one-bedroom rental unit in only 7 percent of all counties across the country.
President Joe Biden attempted to double the wage earlier this year by including it in the $1.9 trillion American Rescue Plan. But the provision was struck down by the Senate Parliamentarian, who ruled that it couldn't be included in the reconciliation bill.
Democrats also reintroduced the Raise the Wage Act this year, which would bump up the minimum wage to $15 an hour by 2025. The bill has 199 co-sponsors in the House of Representatives and 37 co-sponsors in the Senate but has yet to be taken up for a vote.
As Capitol Hill has stalled on the issue, states have taken their own action to raise the minimum wage.
Ten states and the District of Columbia have passed legislation to increase wages to $15 an hour. Delaware on Monday became the latest state to do so as Gov. John Carney signed the bill on Monday.
"What we're doing is really, really important," the governor said at a press conference. "There are many people that go to work every day, work hard, support their families and themselves. And when you think about our work as public officials, there's nothing really more important than giving everybody that opportunity."
Zipperer noted the United States has the economic capacity to pay employees higher wages but has primarily only done so for those who are already at the top of the wage distribution.
"But for a low-wage worker that essentially means that you can't afford a decent standard of living," he said.
He added, "A single adult with no kids is going to need at least a $15 an hour job today in order to afford basic necessities like rent, food, transportation expenses and taxes."
