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Letter to Representatives supporting the amendment to increase the federal minimum wage to $7.25 an hour

July 27, 2006

Dear Representative:

On behalf of the 1.4 million members of the American Federation of State, County and Municipal Employees (AFSCME), I strongly urge you to support legislation to increase the federal minimum wage to $7.25 over two years an hour.  Raising the minimum wage by anything less than $7.25 would be woefully inadequate. Therefore, I urge you to reject any proposal that raises the minimum wage by less than $7.25 and/or is coupled with objectionable “poison pills” such as association health plans, health savings accounts, carve outs from the Fair Labor Standards Act or egregious tax provisions.

 The minimum wage has been stuck at $5.15 an hour since 1997.  In that time, the average price of gas has increased 140 percent.  In the summer of 1997, a gallon of gas averaged $1.36.  Last week, the average price of a gallon of gas was $3.22 a gallon – or a hike of $1.86.  In the summer of 1997, a minimum wage worker had to work 3 hours and 58 minutes to be able to pay for a tank of gas because it took $20.40 to fill a 15-gallon tank.  Last week, the same minimum wage worker had to work 9 hours and 23 minutes in order to fill that same tank because it cost $48.30.  If the minimum wage had increased by the same percentage as a gallon of gas, a minimum wage worker would be earning $12.36 today.

But instead of increasing, the real value of the federal minimum wage has actually declined.  It has been eroded by inflation so that the purchasing power of the minimum wage in 2006 prices is 20 percent below what it was in 1997.  It is no surprise that more Americans – 1.4 million more – lived in poverty in 2004 than lived in poverty in 1997.  At $5.15 an hour, a minimum wage employee working 40 hours a week, 52 weeks a year earns just $10,712 a year.  No one can live on $206 a week or $10,712.  That is almost $6,000 ($5,888) below the poverty level for a family of three and more than $10,000 below the poverty level for a family of four. 

Raising the minimum wage to $7.25 is a modest and much needed increase.  It would mean an additional $4,370 a year.  And while it would still fall a little short of being sufficient to lift a family of three out of poverty, which would require $7.98 an hour, it would benefit 15 and a half million Americans – 7.3 million directly and another 8.2 million indirectly.
 
 A fair increase is long overdue.  It would help millions of Americans pay their bills and despite the claims to the contrary, history has shown that raising the minimum wage does not have any negative impact on employment or inflation.  Please support a clean minimum wage bill that increases the wage to $7.25 an hour.

Sincerely,

Charles M. Loveless
Director of Legislation

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