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Thursday, 16 August 2012 12:26

Higher Minimum Wage Would Create Over 100,000 New Jobs Nationally

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A new report from the Economic Policy Institute (EPI), a think tank in Washington, DC, shows that more than 1.2 million workers in Illinois would benefit from an increase to the federal minimum wage.

Increasing the federal minimum wage from $7.25 to $9.80 per hour would give more than 28 million workers a raise while generating approximately 103,000 new jobs over three years, finds the new EPI report, How raising the federal minimumwage would help working families and give the economy a boost.

The report also provides an in-depth demographic analysis of minimum-wage and low-wage workers, along with state-by-state projections of how many new jobs would be created in each of the 50 states if efforts to raise the federal minimum wage are successful.

"Increasing the minimum wage in this country is shamefully overdue," said Rep. Jan Schakowsky of IL's 9th Congressional District. "Income disparity is the worst it has been since 1928 and continues to pose a major threat to our economy."

"The majority of Americans believe increasing the minimum wage should be one of the top priorities for Congress," said Rep. Schakowsky. The EPI report, she added, "shows that raising the minimum wage would benefit 28 million hardworking Americans across all races, ages, income and educational backgrounds."

EPI researchers show that raising the minimum wage would provide a substantial lift to the national economy and benefit workers still reeling from the effects of the recession, generating almost $40 billion in increased wages.

This additional spending power would be a useful tool to spur job growth, as employers would need to hire new staff to keep up with heightened demand for goods and services. In fact, an increase in the federal minimum wage from $7.25 to $9.80 per hour would result in a net increase in economic activity of approximately $25 billion, generating approximately 100,000 new jobs. This hike would have a positive impact across the country, with job creation in every state.

 In contrast to prevailing myths about minimum-wage workers, raising the minimum wage would benefit millions of workers across demographic groups, not just teenage part-time workers. Almost 88 percent of workers who would be affected are at least 20 years old. Female and non-minority workers would benefit disproportionately from the increase; women comprise nearly 55 percent of those affected, and non-Hispanic white workers make up about 56 percent.

Angel Lopez, a Chicago Dunkin’ Donuts employee earning minimum wage, is just one of over a million workers in Illinois who would benefit from an increased minimum wage. "If I earned closer to 10 bucks an hour, I wouldn’t have to work two jobs," said Lopez.

Until recently, Lopez was working at two different Dunkin' Donuts stores, 32 hours a week at each one. Now he's down to 35 hours a week at just one store but he's looking for a second job, he said, because working one job on minimum wage "doesn't cut it."

"My paycheck is gone as soon as I get it," he said. "I can't even buy myself a new pair of shoes. It's either that or paying the light bill." Raising the minimum wage, he said, "would make a big difference for my family and for other working families like mine."

The report also provides a state-by-state analysis of the job creation and GDP impacts of raising the federal minimum wage. In Illinois, where legislation to raise the state minimum wage is currently moving through the General Assembly, raising the federal minimum wage would create close to 5,000 jobs and would add nearly $1 billion to our economy.

"Anyone who is willing to work for at least 40 hours per week should be able to afford a modest lifestyle without any help from charities or the government," said Sen. Kimberly Lightford, a sponsor of SB 1565, which proposes to raise the Illinois minimum wage from the current $8.25 an hour to $10.65 an hour by 2014. "The minimum wage should be a living wage."

The EPI report comes a few weeks after Rep. George Miller (D-CA), along with over 100 other House Democrats, introduced the “Fair Minimum Wage Act of 2012,” which proposes to raise the federal minimum wage from $7.25 to $9.80 per hour over three years, and peg it to inflation thereafter. Rep. Miller was accompanied by his colleage Sen. Tom Harkin (D-IA), who introduced the same bill in the Senate.

"When we pass this modest increase, we should think of it as a down-payment on our commitment to assure that every hardworking American receives a living wage,” said Rep. Schakowsky.

 In July, the National Employment Law Project released another report on the minimum wage, which argues that the top minimum wage employers in the U.S., nearly all of which have been extremely profitable over the last few years, can afford to pay their employees more in order to hasten economic recovery.

For more information on efforts to raise the minimum wage in Illinois, please visit www.RaiseIllinois.org

For more information on raising the federal minimum wage, please visit www.RaiseTheMinimumWage.org.