Who Benefits: Demographic Impact of a $9.50 Minimum Wage
If Minnesotans receive the minimum wage raise they deserve, working people would benefit from a $470 million spending power increase, giving a much-needed boost to sales at businesses statewide. Women would be especially impacted, as they comprise 57 percent of those likely impacted by a potential $9.50 minimum wage, according to Raise the Wage Coalition member JOBS NOW.
Examining Minnesota employment data for workers whose wages are below $9.50 (and those slightly above who would likely see a raise due to the "spillover effect"), JOBS NOW estimates that a $9.50 an hour minimum wage would mean a raise for 357,000 Minnesotans.
This includes more than 200,000 women, who would gain a $256 million annual purchasing power boost. A $9.50 minimum wage would also would begin helping Minnesota address the growing poverty disparity between white Minnesotans and people of color. More than 83,000 workers of color would see a raise, including 22 percent of black workers (23,548), 29 percent of Hispanic workers (30,337), and 17 percent of Asian workers (29,714).
A $9.50 minimum wage increase would boost wealth by $31 million for Minnesota’s black community and by $43 million for the Hispanic community, according to JOBS NOW findings.
The organization’s report finds 77 percent of workers potentially impacted by a $9.50 wage are 20 years old and above, dispelling the myth that teenagers comprise the majority of those earning minimum wage.
Raising the wage is also important for the state’s broader workforce because its economic rebound has been heavily fueled by low-wage service sector jobs. Forty-five percent of all Minnesota’s recent job openings are part-time, according to the Department of Employment and Economic Development’s latest jobs vacancy survey.
Raising the wage to $9.50 would put Minnesotans at the bottom of the pay scale back on par with 1960s inflation-adjusted wage levels. Had the federal minimum wage maintained its purchasing power since 1968, it would today be over $10.70 an hour, or $22,256 a year for a full-time worker, according to the US Bureau of Labor Statistics. Furthermore, had minimum wage kept pace with average productivity gains, as it did in the decades leading up to the 1960s, it would today be about $22.00 an hour.
Instead it has stagnated and is nowhere near enough to even meet basic living standards in Minnesota. JOBS NOW Cost of Living research shows that in a Minnesota family of four with two full-time working parents and two children, each parent needs to earn at least $14 an hour to meet even basic needs.
Raise the Wage Coalition urges the Minnesota Legislature to act on policy that raises the state’s minimum wage to $9.50 an hour early in the 2014 legislative session.