House Democrats have introduced a bill that would raise the minimum wage to $9.80. It would be the first minimum wage increase since 2009 and the first increase for tipped workers in 21 years.
The Fair Minimum Wage Act of 2012, championed by Rep. George Miller, D-Calif., is receiving a lot of praise from low-wage workers who have been rallying for better pay. The legislation is garnering support especially from restaurant workers - particularly women, who make up two-thirds of all tipped workers - as their starting cash wage of $2.13 per hour has been untouched for two decades.
“Miller’s bill represents the first initiative by House leadership that would include a much-needed increase for tipped workers in more than 15 years, and we cannot thank him enough," said Saru Jayaraman, co-director of ROC United, the only national restaurant workers organization in the country.
"ROC United has been fighting to raise $2.13 for many years and an increase is long overdue for the people who work hard every day to nourish our families at restaurants across America. While the restaurant industry projects record profit in 2012 of $625 billion, our nation’s tipped workers – the servers, bussers, and bartenders at your favorite restaurants – have been earning $2.13 since 1991. The majority of these tipped workers are women, many living in poverty and supporting children, and they can no longer afford to be left behind.”
Miller's bill would increase the minimum wage in three 85-cent steps, over three years, from $7.25 to $9.80 per hour. The rate will then be indexed to inflation each year thereafter.
In addition, the legislation will increase the required cash wage for tipped workers in annual 85 cent increases, from $2.13 per hour until the tip credit reaches 70 percent of the regular minimum wage.
According to the Department of Labor, the minimum wage does not go up automatically, nor does it go up with inflation; it takes an act of Congress to approve an increase. Some states, however, require a higher minimum wage.
Bill supporters argue that states with a higher minimum wage have stronger economies. "A Fiscal Policy Institute study, for example, found that in the 18 states with minimum wages higher than the federal rate, 'indicators of economic performance were consistently better' than in other states," says a fact sheet released by the House Education and the Workforce Committee.