The nation’s current minimum wage of $7.25 per hour has not been increased since 2007. The Raise the Wage Act of 2017 (S. 1242 and H.R. 15), introduced by Senators Patty Murray, Bernie Sanders and Representatives Bobby Scott and Keith Ellison would increase the federal minimum wage from its current rate of $7.25 per hour in eight steps to $15 per hour by 2024. The first step in 2017 would raise the minimum wage to $9.25 per hour. Although many retirees may question what impact an increase in the minimum wage would have on their lives, the increase could make a difference for seniors.
Who Would Be Affected?
A common myth, perpetuated by the media, is that an increase in the minimum wage would primarily affect teenagers. Actually, fewer than 10 percent of those affected by an increase are teenagers. To the contrary, more than half of the 41 million workers who would benefit by an increase are age 25-54, and 56 percent are women. More affected workers are age 55 or older than are teenagers. In fact, 16.1 percent of those who would benefit from an increase in the minimum wage are age 55 or older, as compared to 9.8 percent of teenagers. Although the majority of workers who would benefit from increasing the minimum wage are white, 40 percent of all African Americans would receive higher pay, while 34 percent of all Latinos would benefit.
What Would An Increase Mean For The Economy?
Despite skeptics’ claims to the contrary, research conducted by the Economic Policy Institute, a leading Washington think tank, concluded that raising the minimum wage to $15 per hour in 2024 would directly or indirectly lift the wages of 41 million workers, almost 30 percent of the wage-earning workforce. Over the phase-in period of the increases, $144 billion in additional wages would be generated, streaming out into the community.
These billions would flow into the community because low-wage workers, like many Social Security recipients, need every penny of their monthly checks to make ends meet, so they will spend any additional earnings to meet their basic needs. This contrasts with higher wage-earners, who tend to save a portion of any additional income. Any increased spending by low-wage earners will stimulate the overall economy. Additionally, an increase in the minimum wage will help reduce income inequality by setting a higher floor at the low end of the wage scale.
What Is The Impact On Seniors?
For those 16 percent of affected workers who are age 55 and older, an increase from $7.25 per hour to $15.00 per hour will make an enormous difference in a senior’s quality of life. An individual working fulltime at the current minimum wage earns approximately $15,000 per year, a little less than an average Social Security retiree at $16,000 per year. An increase to $15.00 per hour would increase a worker’s earnings by $3.10 per hour, on average, resulting in a $5,100 increase in annual wages for those who work fulltime. For those working seniors whose wages are increased, the increased earnings would be reflected in their Social Security benefit.
The increase in minimum wage is not simply an economic issue. It is a moral imperative for the nation to stand behind the tenet that people who work hard and play by the rules should be able to support themselves. The increase will begin to address the unacceptable income divide in this country.
The Increase Should Extend To Social Security Benefits
If we as a nation agree that $15,000 per year is insufficient for a minimum wage-earner, we must also agree that $16,000 is insufficient for a Social Security retiree who has worked hard all of his or her life and now finds it difficult to make ends meet. To that end, the National Committee continues its “Boost Social Security Now” campaign to urge Congress to pass legislation that would improve benefits and strengthen Social Security’s financing https://www.ncpssm.org/wp-content/uploads/2017/06/boost-ss-viewpoint.pdf.
The campaign includes proposals to increase benefits, on average, by $70 per month for newly-eligible retirees, address the issue of the inadequate COLAs (or no COLAs), and increase benefits for seniors who have been receiving Social Security for a long time. The benefits that accrue to the economy as a result of increases in the minimum wage would be just as substantial with increases in Social Security benefit levels.
The National Committee to Preserve Social Security and Medicare endorses an increase in the minimum wage to $15.00 per hour and an increase in Social Security benefit levels to assist seniors and the overall economy and reduce the unacceptable income divide in our nation.
Government Relations & Policy, June, 2017
The Federal Minimum Wage: In Brief, David H. Bradley, Congressional Research Service, June 2, 2017, https://www.fas.org/sgp/crs/misc/R43089.pdf
Raising the Minimum Wage to $15 Would Lift Wages for 41 million American Workers, David Cooper, Economic Policy Institute, April 26, 2017, http://www.epi.org/publication/15-by-2024-would-lift-wages-for-41-million/[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]