The Minimum Wage Increase of 2007, Minimum Wage Legislation at the State Level, and Living Wage Ordinances.
In May 2007, Congress agreed on a minimum wage bill as part of the emergency Iraq supplemental spending bill that raised the minimum wage to $7.25, in three steps: $ 5.85 sixty days after the bill was signed into law, $6.55 in 2008, and finally to $7.25 in 2009. The 2007 increase ends the longest time in history since a wage increase since the Fair Labor Standards Act was signed into law.
It is projected that over 13 million workers benefited from this 2007 increase, either directly or indirectly. Moreover, many businesses owners supported the 2007 minimum wage increase because of the positive effects it has in the workplace. Raising the wage helps retain employees, reduces recruitment and training costs, and recycles money back into the local economy. Businesses for Shared Prosperity, a coalition of business leaders who support an increase in the wage, released a statement in January 2007 that said, “Higher wages benefit business by increasing consumer purchasing power, reducing costly employee turnover, raising productivity, and improving product quality, customer satisfaction and company reputation." Signatories of the statement included the CEOs of Costco, the U.S. Women's Chamber of Commerce, Small Business Majority, Eileen Fisher Apparel Company, the owner of the Four Seasons Restaurant in New York, and over 650 other businesses in all 50 states.
However, the minimum wage today, even after the latest increase to $7.25, is still significantly less than the minimum wage, adjusted for inflation, from previous years. In today’s dollars, the 1956 minimum wage was worth $7.93 per hour, while the 1968 minimum wage was worth $9.92 per hour, its highest value in history.
At the State Level
As of July 2010, 14 states and the District of Columbia had passed state minimum wage laws higher than the federal minimum wage level of $7.25 an hour. A complete list of states minimum wage laws can be found at United States Department of Labor’s Wage and Hour Division website. Many state minimum wage laws also extend minimum wage regulations to a greater classification of businesses than does federal law. California’s minimum wage laws, for example, apply to waiters and other service workers who also receive tips.
In addition to successful efforts to raise state minimum wages, there has also been an active push to enact "living wage" ordinances on the local and state level. While ordinances are most common in cities and counties, Maryland passed a state wide living wage ordinance in May 2007. Living wage laws require municipal governments and contractors hired by the city to pay their employees regionally-determined livable wages. The methods for calculating a living wage vary, but in an effort to have earnings better reflect area costs of living, most living wages are tied to regional housing costs.
Living wage ordinances have also been put in place by county governments and universities ranging from Des Moines to Minneapolis to Baltimore. To date, 123 cities, counties and universities have pledged to pay their employees a living wage. An addition 119 campaigns for living wages are currently underway.
The Reform Movement approved a resolution endorsing living wage campaigns at the December 1999 Biennial in Orlando, Florida. For more information on the living wage, consult the Religious Action Center's in-depth issue brief.