New report shows increasing federal minimum wage would give more than 28 million American workers a raise, create jobs, and give boost to local economy
(Rock Island County, Ill) - A new report from the Economic Policy Institute (EPI) shows more than 1,238,225 workers in Illinois would benefit, directly or indirectly, from an increase to the federal minimum wage (see attached report).
Increasing the federal minimum wage from $7.25 to $9.80 per hour would give these workers a raise while generating approximately 4,500 jobs in Illinois, over three years, finds the new EPI Issue Brief authored by Doug Hall, How raising the federal minimum wage would help working families and give the economy a boost.
Nicole Thompson, a minimum wage worker in Rock Island, says a raise in the minimum wage would greatly help her family pay for basic necessities like food and utilities "Sometimes I have to go to the food pantry just to feed my family." Thompson works more than 40 hours a week.
In contrast to prevailing myths about minimum-wage workers, raising the federal 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.
While increasing the minimum wage immediately benefits the lowest-paid workers through boosted earnings, it also yields positive effects on the larger economy. Raising the federal minimum wage to $9.80 would put nearly $40 billion in the hands of directly and indirectly affected families, augmenting their spending power in the local economy. In return, these families would be more likely than any other income group to spend these extra earnings immediately on basic needs or services they could not previously afford.
[mog1] 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.
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.
"With the national unemployment rate not budging below 8.0 percent, now is the perfect time to raise the minimum wage," said Hall. "Not only will it generate billions of new dollars for the economy while adding new jobs when we sorely need them, it will begin to address the wage stagnation working families have faced during the last four decades, while putting more money in their hands when they need it most."[mog2]
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