People have been debating the minimum wage since President Franklin D. Roosevelt first enacted it in 1938. At that time, the minimum wage was 25 cents an hour. Roosevelt wanted Americans to be paid more than “starvation wages” so they could afford their basic needs.
Today, about 2.2 million Americans are paid at or below the federal minimum wage. (Labor laws allow for some workers, including those who get tips, to be paid at a lower rate.) About half of minimum-wage workers are ages 16 to 24.
The federal minimum wage has not gone up in nearly 1o years. In that time, the cost of rent and health care has risen, even after adjusting for inflation. As a result, some workers cannot afford to take care of their families, says Sáenz.
Even in areas with higher wages, the cost of living often goes up faster than pay does. Take Chicago, Illinois, for example. For most workers there, the minimum wage is $11 an hour. Yet, say researchers, a family of four would need two people making at least $17.05 an hour to cover basic expenses.
Raising the minimum wage actually helps states too, Sáenz says. His research found that unemployment rates dropped in states that raised their minimum wages between 2009 and 2013. He says those benefits extend to the entire country.
“These are funds that are going to be used to pay for rent, to buy food, to buy medicine,” Sáenz says. “That money goes back into the economy.”