Federal Minimum Wage 2007

"Politics is not about power. Politics is not about money. Politics is not about winning for the sake of winning. Politics is about the improvement of people's lives. It's about advancing the cause of peace and the justice in our country and in our world. Politics is about doing well for people." -Senator Paul Wellstone (1944-2002)

VLWC Urges U.S. Congress to Increase the Federal Minimum Wage

Last Updated: 07/20/07

Federal Minimum Wage to Increase
Federal Minimum Wage Debate
Frequently Asked Questions
Contact Information for Vermont Congressional Delegation
Click here for More Information on the Vermont Minimum Wage
Read: Fact Sheet: "Fair Minimum Wage Act of 2007" (PDF)
Federal Minimum Wage Vs. Vermont Minimum Wage (PDF)

Federal Minimum Wage to Increase

On May 25th, 2007 President Bush signed into law a bill that will increase the minimum wage, $2.10  will be the final increase at the end of a three-step schedule. The first increase will take effect after 60 days from the date of the bill enactment from $5.15/hr to $5.85, on  July 24, 2007, the minimum wage will then increase from $5.85/hr to $6.55 on July 24, 2008 and it will finally settle down as the new federal minimum wage at $7.25 per hour on July 24, 2009.    

Federal Minimum Wage Debate

On Thursday February 1st, 2007 the US senate passed a bill to boost the federal minimum wage by $2.10 an hour over the next two years, bringing the federal minimum wage to $7.25 an hour by 2009. The bill contained amendments with controversial tax cuts for small businesses. The increase in the minimum wage is the first in a decade. It was approved by a 94-3 vote, finishing a nine day debate on the senate floor. The bill will now be reconciled with the House version that contained no tax provisions passed on January 10, 2007.

Senator Leahy voted yes on the bill, Senator Sanders Voted yes on the bill, and Representative Welch voted yes on the bill.

Check back for more details as the Congress moves to compromise on the final version of the bill.

For more information go to ALF-CIO's website:: www.aflcio.org or the Economic Policy Institute's website: www.epinet.org.

Frequently Asked Questions & Talking Points

Who will benefit from a federal minimum wage increase?
An estimated 13 million workers would benefit from an increase in the federal minimum wage to $7.25 by 2008. Of the total affected workers, 80% are adults and 59% are women. More than one-quarter (26%) of the workers who would benefit from an increase to $7.25 are parents of children under age 18, including 1,395,000 single parents. The average minimum wage worker brings home over half (58%) of his or her family's weekly earnings.

Why do we need a minimum wage increase?
Congress has not increased the minimum wage in ten years??the second-longest stretch of government inaction since the minimum wage was enacted in 1938. A minimum wage increase is needed to restore the minimum wage to historic levels. In addition, the minimum wage is 31% of the average hourly wage of American workers, the lowest level since 1947.

Can a worker support a family on the minimum wage?
One way to answer this question is to ask whether a full-time worker earning the minimum wage would have an income below the federal poverty line. A full-time worker (working 2,080 hours a year) earning $5.15 an hour would earn $10,712 a year, well below the 2007 federal poverty line of $17,170 for a family of three.

Will a minimum wage increase reduce poverty?
The minimum wage raises the wages of low-income workers in general, not just those below the official poverty line. Many families move in and out of poverty, and near-poor families are also important beneficiaries of minimum wage increases. However, it is also important to keep in mind that while the minimum wage is a crucial tool in the effort to end poverty, it is only one part of a larger anti-poverty strategy.

Does the federal minimum wage cause job loss?
A EPI study failed to find any systematic, significant job loss associated with the 1996-97 minimum wage increase. In fact, following the most recent increase in the minimum wage in 1996-97, the low-wage labor market performed better than it had in decades (e.g., lower unemployment rates, increased average hourly wages, increased family income, decreased poverty rates).

How is the minimum wage determined?
The minimum wage is a provision of the Fair Labor Standards Act (FLSA). This law, which was passed in 1938, originally set a minimum wage of $0.25 per hour and also set standards regarding overtime pay and child labor; at the time this was enough for one person to support a family.. Because the provision that passed had no provisions regarding updating the minimum wage, increases are passed at the will of Congress amendments to the FLSA.

Therefore, any increases in the minimum wage are based solely on the political climate and congressional agreement that an increase is needed.

What does it mean that the minimum wage is at its lowest real value in 50 years?
As the basic income required to support a family has grown with inflation, the minimum wage has not kept pace with the rising costs of goods. As a result, federal inaction leaves minimum wage workers in an increasingly dire situation.

The recently released 2007 federal poverty guideline highlights the severe and growing inadequacy of the minimum wage. Currently, a full-time minimum wage worker (40 hours/week, 52 weeks/year) would earn $10,712 a year, falling nearly 40% below the $17,170 poverty level for a family of three. Even after factoring in the earned income tax credit, which was designed to bring low-wage workers up to the poverty line, this worker would still fall short of the poverty line.

Source: Economic Policy Institute (http://www.epi.org/content.cfm/issueguides_minwage_minwagefacts)

Vermont Congressional Delegation Contact Information