[The federal minimum hourly wage is just $7.25 and has not
increased in 14 years, the longest period of congressional inaction in
the history of the minimum wage. The real, cost-of-living-adjusted
value of the minimum wage has fallen by 30%.]
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THE IMPACT OF THE RAISE THE WAGE ACT OF 2023, BY CONGRESSIONAL
DISTRICT  
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Ben Zipperer
August 22, 2023
Economic Policy Institute
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_ The federal minimum hourly wage is just $7.25 and has not increased
in 14 years, the longest period of congressional inaction in the
history of the minimum wage. The real, cost-of-living-adjusted value
of the minimum wage has fallen by 30%. _

Sen. Bernie Sanders (I-Vt.) speaks at a press conference on raising
the federal minimum wage outside the U.S. Capitol Building May 4, 2023
in Washington, D.C., Anna Moneymaker/Getty Images

 

What does the Raise the Wage Act of 2023 do?

The federal minimum hourly wage is just $7.25 and has not increased in
14 years, the longest period of congressional inaction in the history
of the minimum wage. As a result, the real, cost-of-living-adjusted
value of the minimum wage has fallen by 30%.

The Raise the Wage Act of 2023, introduced in the U.S. House of
Representatives and U.S. Senate on July 25, 2023, would raise the
federal minimum wage to $17 an hour by 2028. The bill would also
gradually raise and then eliminate subminimum wages for tipped
workers, workers with disabilities, and youth workers, so that all
workers covered by the Fair Labor Standards Act (FLSA) would be at the
same wage level.

What would its impact be?

EPI’s analysis shows that a $17 minimum wage in 2028 would raise the
wages of 27,858,000 workers across the country, or about 19% of the
workforce. The increases would provide an additional $86 billion
annually in wages for the country’s lowest-paid workers, with the
average affected worker who works year-round receiving an extra $3,100
per year.

HOW MANY WORKERS WOULD BENEFIT IN EACH CONGRESSIONAL DISTRICT?

TABLE 1 shows the number and shares of workers in each congressional
district who would receive wage increases if the Raise the Wage Act of
2023 were enacted into law.

Why are workers in some states less likely to be affected?

In summer 2023, 19 states and localities implemented minimum wage
increases based on state, local, or municipal laws
[[link removed]] that
already set the minimum wage higher than the federal standard. In
total, 30 states and the District of Columbia have a minimum wage
above the federal minimum [[link removed]],
and many more localities have minimum wages above their state minimum
wage. Workers in most of these states will still benefit from a $17
federal minimum wage, but the effect is muted because low-wage workers
in those states have already seen wage increases above the federal
minimum.

California, the District of Columbia, Hawaii, and Washington all have
state- or municipality-level minimum wage laws that will set minimum
wages close to, or above, the Raise the Wage Act’s proposal of $17
by 2028. Because of this, only a small number of workers in those
states would be directly affected by the federal policy as
state/local laws will have already raised the wages of low-wage
workers in those jurisdictions. Because of the smaller impacted
population, more detailed impact estimates are unavailable for those
states. (Cells for which data are unavailable are marked with * in
Table 1.)

Why is it critical that the Raise the Wage Act be passed?

As EPI’s state-by-state minimum wage tracker shows
[[link removed]], raising the federal
minimum wage is critical to protect workers (especially in the South)
who have been left behind. A higher federal minimum wage can build on
existing state-level standards and lock in the wage gains
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workers in the economic recovery from the COVID-19 pandemic.

ASSUMPTIONS AND DOCUMENTATION FOR EPI’S MINIMUM WAGE SIMULATION
MODEL

* The estimates are for the year 2028, when the policy’s regular
minimum wage is $17 and the tipped minimum wage is $15.
* The underlying wage distribution is based on the 2022 Current
Population Survey.
* The underlying geographic data is based on the 2015–2019
American Community Survey (ACS), reweighted to match 2019 ACS-based
gender-specific employment counts of congressional districts for the
118th Congress.
* The simulation assumes nominal wage growth will be at a 5.0%
annual rate between 2022 and 2023, and at an annual rate of 0.5% plus
projected CPI growth in subsequent years.
* The simulation accounts for estimated effects of projected state
and local minimum wages between 2023 and 2028.
* To read more about the EPI Minimum Wage Simulation Model, see the
description in Cooper, Mokhiber, and Zipperer (2019)
[[link removed]].

_BEN ZIPPERER joined the Economic Policy Institute in 2016. His areas
of expertise include the minimum wage, inequality, and low-wage labor
markets. He has published research in The Quarterly Journal of
Economics and the Industrial and Labor Relations Review and has
been quoted in outlets such as The New York Times, The Washington
Post, Bloomberg, and the BBC._

_Prior to joining EPI, Zipperer was research economist at the
Washington Center for Equitable Growth. He is a senior research
associate at the Center for Economic and Policy Research, a research
associate at the Center on Wage and Employment Dynamics at the
University of California, Berkeley, and an associate at the Johns
Hopkins Bloomberg School of Public Health._

_EPI is an independent, nonprofit think tank that researches the
impact of economic trends and policies on working people in the United
States. EPI’s research helps policymakers, opinion leaders,
advocates, journalists, and the public understand the bread-and-butter
issues affecting ordinary Americans._

_Join with EPI to build an economy that works for everyone
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We need your help in order to continue our work on behalf of
hard-working Americans. Our donors value our high-quality research,
reputation for truth-telling, and practical policy solutions. Your
tax-deductible gift to EPI makes you an important partner in providing
this critical public service._

* Minimum Wage
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* federal government
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* Congress
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* legislation
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