Via the Fair Minimum Wage Act of 2012 (H.R. 6211), House Democrat George Miller (Calif.) has introduced proposed legislation which would increase the federal minimum wage from its current level of $7.25/hour to $9.80 over the next three years. This proposal comes on the heels of a letter to President Obama from prominent economists, including Nobel winner Joseph Stiglitz, opining that such an increase could stimulate economic growth, rather than hamper it. The letter asserts that new research in economics has shown “increases in the minimum wage have had little or no negative effect on the employment of minimum wage workers, even during times of weakness in the labor market. A minimum wage increase can also serve to stimulate the economy as low-wage workers spend their additional earnings potentially raising demand and job growth.”
While states and certain municipalities continue to set their own respective minimum wage floor above the federal level, this proposed increase would cause the federal minimum wage to eclipse many of those states, and in some states trigger state law increases due to state legislation requiring the state minimum wage to equal or exceed the federal minimum wage. While passage during an election is unlikely, the federal minimum wage (flat since July, 2009), will certainly continue to be an important legislative topic. Watch this space for further developments.