The national debate over raising the minimum wage may not seem to have much to do with retirement security.  But it truly does, especially for women —– and women of color, in particular. As the Baltimore Sun reported this week, “Female workers make up a large share of low-wage workers, so they stand to benefit from the proposed federal increase as well as from planned phased-in increases in (the states).”  The National Committee advocates for a $15 minimum/hour minimum wage, not only because we want workers to earn a living wage, but because it improves women’s retirement security.   

We asked NCPSSM senior policy analyst Maria Freese, an expert in women’s retirement issues, why a higher minimum wage is so crucial for women in the long run.  For more information, visit   

How does the minimum wage affect women’s retirement security? 

A:  The primary reason is that you more you make, the more you’re likely to save for retirement. If you’re a minimum wage worker and the minimum wage goes up — and you have more money in your pocket — you’ll have more money left over to save for retirement. Women’s retirement savings rates historically have lagged behind men’s.

Why does the minimum wage affect women more than men? 

A:  Because women tend to be in jobs that pay minimum wage, especially women of color. Typical ‘job tracks’ tend to steer women toward lower-paying service and retail positions. There are many reasons for this, including discrimination and a lack of encouragement and training for some women to seek more professional-level work that pays more.

Does the minimum wage affect retirement security in other ways?  

A:  Yes. It helps hourly wage-earners who have retirement plans at work (such as 401Ks), which are based on a percentage of wages. If your wages go up, your dollar amount contribution to the 401K goes up automatically.  You don’t even have to make a change in your 401K plan for that to happen.

How does the minimum wage affect Social Security benefits? 

A:   Social Security benefits are based on lifetime earnings. If the minimum wage goes up, then many hourly workers earning the minimum wage will receive higher Social Security benefits when they retire.

How would a rise in the minimum wage benefit non-minimum wage earners? 

A:  There is a linkage between the wages of hourly workers at any given employer and what the employer pays salaried workers. Generally, the higher the wages at the bottom of the ladder, the better the pay at higher levels.  It’s a ‘rising tide lifts all boats’ situation. So even if you don’t earn the minimum wage, your pay may go up if the minimum wage increases.

Many in the business community have claimed that raising the minimum wage to $15/hour would kill jobs and drive people out of business.  What is your response to that? 

A:  It’s a myth. Not true.  Real-world experience does not bear that out. Look at Washington state, for example. The state raised the minimum wage to nearly $15 an hour, and we have not seen an outflow of businesses or precipitous falloff in jobs (unrelated to the pandemic) compared with other states. In fact, from all indications, the business climate in Washington state (with its higher minimum wage) is very good.

Has there been any progress in Congress on raising the federal minimum wage from the current $7.50/hour? 

A: Not much, unfortunately.  A $15 federal minimum wage was part of President Biden’s original Build Back Better agenda, but the Senate parliamentarian ruled that the minimum wage couldn’t be raised through the budget reconciliation process — the vehicle that Democrats are using to enact other parts of the President’s agenda on a simple, party-line vote.  It appears that enough Republicans would have to vote for a higher minimum wage in order for the measure to pass the Senate. There is more than one bill to do so in Congress, but don’t expect them to go too far until the makeup of the Senate changes.  In the meantime, we’ll keep fighting for it.

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