MINIMUM WAGE

Senator Levin is an original cosponsor of the Fair Minimum Wage Act, which would raise the minimum wage by $0.70 in three increments, with an end result of a minimum wage of $7.25 an hour. On January 10, 2007, the House of Representatives passed the minimum wage increase. The Senate passed the minimum wage bill on February 1, 2007. Differences between the bills must now be reconciled.

Senator Levin believes that a full-time minimum wage job should provide a minimum standard of living in addition to giving workers the dignity that comes with a paycheck. These lower paid workers, many of whom have entered the workforce due to the welfare reform, should be rewarded for going to work, not penalized by a poverty level wage.

In 1996 Congress raised the minimum wage by 90 cents an hour in two steps to $5.15 an hour, where it now still stands . This increase was enacted more than ten years ago. Since then, the real value of that wage has eroded by 21 percent and the nearly 5.5 million workers earning the minimum wage have already lost all of the gains from the 1996-1997 increase. Since then, Gallup polls have shown that 86% of small business owners do not think that the minimum wage affects their business, and nearly half of small business owners think that the minimum wage should be increased. Since then, 29 states, including Michigan , as well as the District of Columbia have recognized the importance of keeping our working families out of poverty by increasing state minimum wages.

According to the United States Department of Labor, over 60 percent of minimum wage earners are women; almost 40 percent are minorities, and nearly 80 percent are adults. These hardworking Americans deserve a fair deal.

Unfortunately, since the 1970s, poverty has increased by 50 percent among full-time, year-round workers. Currently, 37 million Americans, including 13 million children, live in poverty. As the most prosperous nation in the world, our minimum wage should be a living wage, and it is not. When a father or mother works full time, 40 hours a week, year-round, they should be able to lift their family out of poverty. A full-time minimum wage laborer working 40 hours a week for 52 weeks earns $10,700 per year -- more than $6,000 below the federal poverty guidelines for a family of three.

A higher minimum wage has the potential to ensure that lower paid workers will be protected from falling into poverty and possibly back on the welfare rolls. The minimum wage increase during the recession in 1991 provided much needed income to poor people and helped to increase spending in the economy. 58% of the benefit of the 1996 increase went to families in the bottom 40% of income groups. Over one-third of the benefit went to the poorest families-those in the bottom 20% of income groups.

Senator Levin believes that it is only fair that all hard-working Americans earn a livable wage. Many people at the low end of the pay scale do not have the bargaining power to negotiate a fair salary. It is necessary that we act to ensure that they receive a fair wage.