United States Department of Labor
Myth: Raising the minimum wage will only benefit teens.
Not true: The typical minimum
wage worker is not a high-school student earning weekend pocket money.
In fact, 88 percent of those who would benefit from a federal minimum
wage increase are age 20 or older, and 55 percent are women.
Myth: Increasing the minimum wage will cause people to lose their jobs.
Not true: A review of 64 studies
on minimum wage increases found no discernable effect on employment.
Additionally, more than 600 economists, seven of them Nobel Prize
winners in economics, have signed onto a letter in support of raising
the minimum wage to $10.10 by 2016.
Myth: Small business owners can't afford to pay their workers more, and therefore don't support an increase in the minimum wage.
Not true: A June 2014 survey
found that more than 3 out of 5 small business owners support increasing
the minimum wage to $10.10. Small business owners believe that a higher
minimum wage would benefit business in important ways: 58% say raising
the minimum wage would increase consumer purchasing power. 56% say
raising the minimum wage would help the economy. In addition, 53% agree
that with a higher minimum wage, businesses would benefit from lower
employee turnover, increased productivity and customer satisfaction.
Myth: Raising the federal tipped minimum wage ($2.13 per hour since 1991) would hurt restaurants.
Not true: In California,
employers are required to pay servers the full minimum wage of $9 per
hour - before tips. Even with a recent increase in the minimum wage, the
National Restaurant Association projects California restaurant sales
will outpace the U.S. average in 2014.
Myth: Raising the federal tipped minimum wage ($2.13 per hour since 1991) would lead to restaurant job losses.
Not true: Employers in San
Francisco must pay tipped workers the full minimum wage of $10.74 per
hour – before tips. Yet, the San Francisco restaurant industry has
experienced positive job growth over the past few years according to the
Bureau of Labor Statistics.
Myth: Raising the federal minimum
wage won't benefit workers in states where the hourly minimum rate is
already higher than the federal minimum.
Not true: Only 23 states and the
District of Columbia currently have a minimum wage higher than the
federal minimum, meaning a majority of states have an hourly minimum
rate at or below the federal minimum. Increasing the federal minimum
wage will boost the earnings for some 28 million low-wage workers
nationwide. That includes workers in those states already earning above
the current federal minimum. Raising the federal minimum wage is an
important part of strengthening the economy. A raise for minimum wage
earners will put more money in more families' pockets, which will be
spent on goods and services, stimulating economic growth locally and
nationally.
Myth: Younger workers don't have to be paid the minimum wage.
Not true: While there are some
exceptions, employers are generally required to pay at least the federal
minimum wage. Exceptions allowed include a minimum wage of $4.25 per
hour for young workers under the age of 20, but only during their first
90 consecutive calendar days of employment with an employer, and as long
as their work does not displace other workers. After 90 consecutive
days of employment or the employee reaches 20 years of age, whichever
comes first, the employee must receive the current federal minimum wage
or the state minimum wage, whichever is higher. There are programs
requiring federal certification that allow for payment of less than the
full federal minimum wage, but those programs are not limited to the
employment of young workers.
Myth: Restaurant servers don't need to be paid the minimum wage since they receive tips.
Not true: An employer can pay a
tipped employee as little as $2.13 per hour in direct wages, but only if
that amount plus tips equal at least the federal minimum wage and the
worker retains all tips and customarily and regularly receives more than
$30 a month in tips. Often, an employee's tips combined with the
employer's direct wages of at least $2.13 an hour do not equal the
federal minimum hourly wage. When that occurs, the employer must make up
the difference. Some states have minimum wage laws specific to tipped
employees. When an employee is subject to both the federal and state
wage laws, he or she is entitled to the provisions of each law which
provides the greater benefits.
Myth: Only part-time workers are paid the minimum wage.
Not true: About 53 percent of all
minimum wage earners are full-time workers, and minimum wage workers
contributed almost half (46 percent) of their household's wage and
salary income in 2011. Moreover, more than 88 percent of those who would
benefit from raising the federal minimum wage from $7.25 to $10.10 are
working adults, and 55 percent are working women.
Myth: Increasing the minimum wage is bad for businesses.
Not true: Academic research has shown that higher wages sharply reduce employee turnover which can reduce employment and training costs.
Myth: Increasing the minimum wage is bad for the economy.
Not true: Since 1938, the federal
minimum wage has been increased 22 times. For more than 75 years, real
GDP per capita has steadily increased, even when the minimum wage has
been raised.
Myth: The federal minimum wage goes up automatically as prices increase.
Not true: While some states have
enacted rules in recent years triggering automatic increases in their
minimum wages to help them keep up with inflation, the federal minimum
wage does not operate in the same manner. An increase in the federal
minimum wage requires approval by Congress and the president. However,
in his call to gradually increase the current federal minimum wage to
$10.10 per hour, President Obama has also called for it to adjust
automatically with inflation. Eliminating the requirement of formal
congressional action would likely reduce the amount of time between
increases, and better help low-income families keep up with rising
prices.
Myth: The federal minimum wage is higher today than it was when President Reagan took office.
Not true: While the federal
minimum wage was only $3.35 per hour in 1981 and is currently $7.25 per
hour in real dollars, when adjusted for inflation, the current federal
minimum wage would need to be more than $8 per hour to equal its buying
power of the early 1980s and more nearly $11 per hour to equal its
buying power of the late 1960s. That's why President Obama is urging
Congress to increase the federal minimum wage and give low-wage workers a
much-needed boost.
Myth: Increasing the minimum wage lacks public support.
Not true: Raising the federal
minimum wage is an issue with broad popular support. Polls conducted
since February 2013 when President Obama first called on Congress to
increase the minimum wage have consistently shown that an overwhelming
majority of Americans support an increase.
Myth: Increasing the minimum wage
will result in job losses for newly hired and unskilled workers in what
some call a “last-one-hired-equals-first-one-fired” scenario.
Not true: Minimum wage
increases have little to no negative effect on employment as shown in
independent studies from economists across the country. Academic
research also has shown that higher wages sharply reduce employee
turnover which can reduce employment and training costs.
Myth: The minimum wage stays the same if Congress doesn't change it.
Not true: Congress sets the
minimum wage, but it doesn't keep pace with inflation. Because the cost
of living is always rising, the value of a new minimum wage begins to
fall from the moment it is set.
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