Increasing the federal minimum wage from $7.25 to $9.80 per hour would create 1,800 net new jobs in Alabama and give nearly half a million Alabamians a raise, according to a study released Tuesday by the Economic Policy Institute (EPI), a nonprofit policy research organization based in Washington, D.C.
The wage increase would boost economic growth and help millions of low-income workers still struggling in the Great Recession’s aftermath.
The report analyzes the effects of federal legislation proposed by U.S. Sen. Tom Harkin, D-Iowa, and U.S. Rep. George Miller, D-Calif. The measures would increase the minimum wage in three 85-cent increments until it reached $9.80 per hour in July 2014.
The bills also would increase the tipped minimum wage for restaurant servers and other workers, which has been $2.13 per hour since 1996, in 85-cent increments until it reached 70 percent of the regular minimum wage. The amounts then would be indexed to inflation.
More than 28 million Americans would receive a total of almost $40 billion in higher wages if the increase becomes law, the report estimates. In Alabama, more than 492,000 people would enjoy $741 million in additional wages. The average annual wage increase would be $660.
The increases would go both to workers making minimum wage and to people with wages between the current minimum wage and the proposed new level. A higher minimum wage would benefit workers across all demographic groups, not just teenagers working part-time summer jobs. Almost nine in 10 Alabamians who would benefit are age 20 or older, the study finds, and 57.3 percent are women.
“A minimum wage increase would be good for low-income Alabamians and good for our economy,” ACPP executive director Kimble Forrister said. “It would make a real difference for our neighbors who are struggling the most in these difficult times, and it would create jobs by prompting hundreds of millions of dollars of new retail spending.”
The full EPI report, “How Raising the Federal Minimum Wage Would Help Working Families and Give the Economy a Boost,” is available here. State-level estimates of the proposed increase’s effects are available here.
Arise Citizens’ Policy Project is a nonprofit statewide coalition of 150 congregations and organizations promoting public policies to improve the lives of low-income Alabamians.