Sorting out the Facts about a Higher Minimum Wage

The higher minimum wage debate is a hot issue right now and there are passionate people making persuasive arguments on both sides of the debate. Reality is messy and the issue is complicated. There are skewed facts and half-truths on both sides.

Fortunately, there are facts we can rely on.

Fact: Most minimum wage earners are NOT suburban teens.

It’s common for people to think that minimum wage earners are spoiled suburban teens who have no bills and just want to earn some spending money. While that might be the case in a perfect world, it’s just not the reality.

Pew Research has found that only about 24% of minimum wage earners are age 19 or younger. In fact, about half of all minimum wage earners are over age 25! About two thirds of them are women. Adult women are the biggest single demographic of minimum wage earners!

Fact: The minimum wage is lower for tipped employees in most (but NOT all) states.

The federal minimum wage for a tipped employee is just $2.13 per hour which is one of the reasons why tipping is so important. Of course, this amount varies by state.

While 17 states strictly adhere to the minimum federal requirement, 33 states opt to pay their tipped employees a higher minimum wage.

Of these higher paying states, seven states pay their tipped employees the exact same minimum wage as every other minimum wage employee. The West Coast is especially generous, since those seven states include Alaska, Washington, Oregon, California, Nevada and Montana! The other participant is Minnesota.

Fact: Higher minimum wages don’t necessarily mean higher prices. 

One of the most common arguments against the higher minimum wage is that all prices will increase because of the increased cost of labor. This isn’t necessarily true, however.

As the previous fact shows, the minimum wage for tipped workers varies from $2.13 to $11 per hour across the United States. However, restaurant prices are fairly consistent. Meals at Applebee’s and other franchise restaurants don’t vary dramatically by state depending on their minimum wage laws.

For example: You can get the $2 for $20 deal at Applebee’s locations in Washington (where your waitress is paid $11 per hour) and in Utah (where they’re paid just $2.13 per hour).

Fact: There are NO states where a full-time minimum wage earner can afford a one-bedroom apartment.

According to the National Low Income Housing Coalition, there is no state in the United States where a full-time minimum wage worker can afford a one-bedroom apartment. In many states, a minimum wage earner would have to work 100 hours per week to afford a typical rent!

As a general rule, renters are required to earn three times the amount of rent. Federal guidelines dictate that a household shouldn’t spend more than 30% of their income on housing expenses. When it comes to getting an apartment, these rules can be catastrophic for minimum wage earners.

Heather, a single woman from Utah, wrote:

“Minimum wage in Utah hasn’t changed to reflect the drastic change in cost of living. I make almost double minimum wage when managing but I still couldn’t get an apartment on my own. I used to find one bedroom apartments for $500. Now I can’t even find rooms for that price!”

Fact: Raising the state minimum wage can have tragic consequences for low income families.

There is one major problem for low income families who live in states with a higher minimum wage. Click here to see how raising a state minimum wage can cost low income families tens of thousands of dollars – and leave them even worse off financially than they were before!

How do YOU feel about raising the minimum wage?

Let’s discuss in the comments below!

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