I am proud to announce that millions of Americans will receive a much-needed pay raise today.
Almost four and a half million workers in 31 states will see a bigger paycheck when the federal minimum wage increases from $6.55 per hour to $7.25 per hour. This is the final of three increases to be implemented under a law enacted by the Democratic Congress in 2007.
This law provided the first minimum wage increase in a decade for our lowest-paid workers and their families. The buying power of the minimum wage had fallen to a 51-year low, and families were struggling with rising housing costs, unpredictable energy bills, and skyrocketing health care premiums.
We have seen where the low road of low wages and rising inequality leads -- to an unbalanced, unhealthy, and unsustainable economy.
Today's pay raise comes as even more Americans are struggling to make ends meet and provide for their families.
•Three-quarters of those who will benefit from this wage increase are 20 years old or older.
•More than half are families with yearly incomes of less than $35,000.
•Over sixty percent of them are women, and over 400,000 of them are single parents with kids under 18. And over two million children will benefit from this boost in their parents' wages.
The average minimum wage worker brings home the lion-share of their family's earnings. In fact, about half of all minimum wage workers work full time and another third work between 20 and 34 hours per week. In the wealthiest country in the world, it is an outrage that anyone who works full-time still winds up in poverty.
Unlike tax cuts for the wealthy, a higher minimum wage increases consumer spending on local businesses, which is good for everyone. In fact, a recent study by economists at the Federal Reserve Bank of Chicago found that every dollar increase in the minimum wage leads to an $800 increase in spending per quarter by families with minimum wage workers.
The Economic Policy Institute estimated that this increased purchasing power will boost consumer spending by more than $5.5 billion over the next 12 months. This increase will provide millions of families with about $120 in extra monthly income to help pay their grocery bills or fill up their cars.
Especially in this economy, Congress will continue to look at solutions that will help all Americans build a better life for themselves and their families.
(Cross-posted at the EdLabor Journal.)