Federal Minimum Wage Hike Approved by Wrong House Committee Targets Wrong People

Hike neglects needy, targets families with average income of over $45,000 a year, according to Employment Policies Institute
  • Publication Date: June 2006

  • Topics: Minimum Wage

Washington, DC – The House Appropriations Committee approved legislation today that would raise the federal minimum wage to $7.25 an hour. According to the Employment Policies Institute [EPI], the average family income of those who would benefit from the increase is $45,580 a year. A full House vote on the issue is expected as early as next week.

According to U.S. Census Bureau data, 85% of employees whose wages would be increased by the proposed minimum wage hike either live with their parents or another relative, live alone, or have a working spouse. Just 15% are sole earners in families with children, and each of these sole earners has access to supplemental income through the Earned Income Tax Credit.

National Distribution of Workers Affected by Proposed $7.25 Federal Minimum Wage:

41% Living with a Parent or Relative
20% Dual Earner in a Married Couple (With or Without Children)
24% Single or Married (Single Earner) With No Children
15% Single Parent With Children or Single Earner in a Couple With Children

“Census data shows us that the vast majority of the benefits from a minimum wage hike will go to families that aren’t in need,” said Mike Flynn, EPI’s director of legislative affairs. “Instead of passing a minimum wage hike, an acknowledged job-killer, Congress needs to expand the Earned Income Tax Credit, which is far and away a more effective tool for reaching hard-working families in need of assistance.”

One of the more surprising elements of this measure was that it was passed out of the House Appropriations Committee.

“There’s no need for the Appropriations Committee to take up this issue,” added Flynn. “If raising the minimum wage is to be brought up at all, it should be under the Education and the Workforce Committee who has traditionally overseen this issue.”

For a state-by-state breakdown of who will benefit from a $7.25 minimum wage increase go to www.MinimumWage.org

The Employment Policies Institute is a nonprofit research organization dedicated to studying public policy issues surrounding entry-level employment. For additional information or to schedule an interview contact Alison Preszler at (202) 463-7650.