WV Center on Budget and Policy > Blog > Family Economic Security > 191,000 Workers in WV Would Benefit From a Minimum Wage Increase

191,000 Workers in WV Would Benefit From a Minimum Wage Increase

A new report from the Economic Policy Institute looks the economic impact of Fair Minimum Wage Act of 2013, which was introduced in Congress in response to President Obama’s call to raise the minimum wage made during this year’s State of the Union address. The Fair Minimum Wage Act of 2013 would raise the minimum wage to $10.10/hr through three incremental increases of $0.95/hr, and then index it to inflation. The minimum wage has not kept up with rising inflation; today’s minimum wage is lower than it was in 1968 after adjusting for inflation. The minimum wage is also insufficient to keep a minimum wage earner’s family out of poverty, unlike in the past, and it has not risen with increased productivity and an expanding economy.

In West Virginia, an estimated 191,000 workers would see higher wages because of the minimum wage increase, both directly and indirectly. Raising the minimum wage to $10.10/hr would increase the wages of these workers by a total of $360 million, or an average of $2,444 annually per worker. The increase in wages would stimulate demand for goods and services, increasing the state’s GDP by $228 million, and help create 900 jobs.

While the perception exists that many minimum wage earners are simply teenagers with part-time jobs, the reality is that the most of the beneficiaries of an increase in the minimum wage are adults working full time to support their families. For example, in West Virginia:

Over 90 percent of the beneficiaries of a minimum wage increase are over the age of 20.

Nearly 60 percent work full time, and nearly 90 percent work at least 20 hours a week.

More than 28 percent have children, while over 41 percent are married.

Almost 84 percent have at least a high school education, while almost 38 percent have at least some college education.

In addition, 25% of children in West Virginia live with at least one parent who would benefit from an increase in the minimum wage. The 191,000 workers in West Virginia who would benefit from a minimum wage increase earn on average 52% of their family’s income, and 19.5% of them are their family’s sole provider of income. An increase in the minimum wage would also benefit women, who make up 60% of those who would see a wage increase in West Virginia.

For West Virginia, increasing the minimum wage would boost the incomes of some of the state’s hardest workers, help families, and spur economic growth. In the past decades, wage increases for working families in West Virginia have been scarce. Increasing the minimum wage would help reverse that trend.

5 Responses to “191,000 Workers in WV Would Benefit From a Minimum Wage Increase”

  1. Steve says:

    Just one question…where in all of the facts and figures does it show how many workers will be “let go” or have their hours cut back because they can’t afford to keep paying said employee?

    • Sean O'Leary Sean O'Leary says:

      Steve,

      The overall effect of an increase on minimum wage has little to no effect on employment. Employers have other ways to adjust their costs rather than letting go of employees, and the cost of an increase in the minimum wage small compared other costs that businesses are constantly adjusting for.

      It’s true that one way businesses can adjust is to reduce hours, but that’s not the only way. The biggest adjustment is through the reduction of turnover, which raising the minimum wage helps. Minimum wage employees have high levels of turnover, which increases costs for their employers, who are constantly hiring and training new employees. Raising wages reduced turnover, which reduces costs, offsetting the wage increase.

      Also, for a minimum wage worker, a reduction in hours coupled with a pay increase would likely still result more income for the worker, even at some of the higher estimates of the impact.

      Here is a recent report that summarizes these and some of the other effects of a minimum wage increase, and why it has little effect on employment.

      http://www.cepr.net/documents/publications/min-wage-2013-02.pdf

  2. Steve says:

    Just one question…where in all of the facts and figures does it show how many workers will be “let go” or have their hours cut back because they can’t afford to keep paying said employee?

  3. Jessica says:

    When is the rate increase to take place?

    • Sean O'Leary Sean O'Leary says:

      Jessica,

      None of the proposals to raise the minimum wage have passed, so as of right now, there is no planned increase.

      Sean O’Leary

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