89–006 

116TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 116–150 

RAISE THE WAGE ACT 

JULY 11, 2019.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. SCOTT of Virginia, from the Committee on Education and 

Labor, submitted the following 

R E P O R T 

together with 

MINORITY VIEWS 

[To accompany H.R. 582] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Education and Labor, to whom was referred 

the bill (H.R. 582) to provide for increases in the Federal minimum 

wage, and for other purposes, having considered the same, report 

favorably thereon with an amendment and recommend that the bill 

as amended do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 4 

Committee Action .................................................................................................... 6 

Committee Views ..................................................................................................... 14 

Section-by-Section Analysis .................................................................................... 45 

Explanation of Amendments ................................................................................... 47 

Application of Law to the Legislative Branch ....................................................... 47 

Unfunded Mandate Statement ............................................................................... 47 

Earmark Statement ................................................................................................. 47 

Roll Call Votes ......................................................................................................... 47 

Statement of Performance Goals and Objectives .................................................. 56 

Duplication of Federal Programs ............................................................................ 56 

Hearings ................................................................................................................... 56 

Statement of Oversight Findings and Recommendations of the Committee ...... 56 

New Budget Authority and CBO Cost Estimate ................................................... 56 

Committee Cost Estimate ....................................................................................... 60 

Changes in Existing Law Made by the Bill, as Reported ..................................... 60 

Minority Views ......................................................................................................... 78 

The amendment is as follows: 


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Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Raise the Wage Act’’. 

SEC. 2. MINIMUM WAGE INCREASES. 

(a) IN GENERAL.—Section 6(a)(1) of the Fair Labor Standards Act of 1938 (29 

U.S.C. 206(a)(1)) is amended to read as follows: 

‘‘(1) except as otherwise provided in this section, not less than— ‘‘(A) $8.55 an hour, beginning on the effective date under section 7 of the 

Raise the Wage Act; ‘‘(B) $9.85 an hour, beginning 1 year after such effective date; 

‘‘(C) $11.15 an hour, beginning 2 years after such effective date; 

‘‘(D) $12.45 an hour, beginning 3 years after such effective date; 

‘‘(E) $13.75 an hour, beginning 4 years after such effective date; 

‘‘(F) $15.00 an hour, beginning 5 years after such effective date; and 

‘‘(G) beginning on the date that is 6 years after such effective date, and 

annually thereafter, the amount determined by the Secretary under subsection (h);’’. 

(b) DETERMINATION BASED ON INCREASE IN THE MEDIAN HOURLY WAGE OF ALL

EMPLOYEES.—Section 6 of the Fair Labor Standards Act of 1938 (29 U.S.C. 206) is 

amended by adding at the end the following: 

‘‘(h)(1) Not later than each date that is 90 days before a new minimum wage determined under subsection (a)(1)(G) is to take effect, the Secretary shall determine 

the minimum wage to be in effect under this subsection for each period described 

in subsection (a)(1)(G). The wage determined under this subsection for a year shall 

be— 

‘‘(A) not less than the amount in effect under subsection (a)(1) on the date 

of such determination; 

‘‘(B) increased from such amount by the annual percentage increase, if any, 

in the median hourly wage of all employees as determined by the Bureau of 

Labor Statistics; and ‘‘(C) rounded up to the nearest multiple of $0.05. 

‘‘(2) In calculating the annual percentage increase in the median hourly wage of 

all employees for purposes of paragraph (1)(B), the Secretary, through the Bureau 

of Labor Statistics, shall compile data on the hourly wages of all employees to determine such a median hourly wage and compare such median hourly wage for the 

most recent year for which data are available with the median hourly wage determined for the preceding year.’’. 

SEC. 3. TIPPED EMPLOYEES. 

(a) BASE MINIMUM WAGE FOR TIPPED EMPLOYEES AND TIPS RETAINED BY EMPLOYEES.—Section 3(m)(2)(A)(i) of the Fair Labor Standards Act of 1938 (29 U.S.C. 

203(m)(2)(A)(i)) is amended to read as follows: 

‘‘(i) the cash wage paid such employee, which for purposes of such determination shall be not less than— 

‘‘(I) for the 1-year period beginning on the effective date under section 7 

of the Raise the Wage Act, $3.60 an hour; 

‘‘(II) for each succeeding 1-year period until the hourly wage under this 

clause equals the wage in effect under section 6(a)(1) for such period, an 

hourly wage equal to the amount determined under this clause for the preceding year, increased by the lesser of— 

‘‘(aa) $1.50; or 

‘‘(bb) the amount necessary for the wage in effect under this clause 

to equal the wage in effect under section 6(a)(1) for such period, rounded up to the nearest multiple of $0.05; and 

‘‘(III) for each succeeding 1-year period after the increase made pursuant 

to subclause (II), the minimum wage in effect under section 6(a)(1); and’’. 

(b) TIPS RETAINED BY EMPLOYEES.—Section 3(m)(2)(A) of the Fair Labor Standards Act of 1938 (29 U.S.C. 203(m)(2)(A)) is amended— 

(1) in the second sentence of the matter following clause (ii), by striking ‘‘of 

this subsection, and all tips received by such employee have been retained by 

the employee’’ and inserting ‘‘of this subsection. Any employee shall have the 

right to retain any tips received by such employee’’; and 

(2) by adding at the end the following: ‘‘An employer shall inform each employee of the right and exception provided under the preceding sentence.’’. 

(c) SCHEDULED REPEAL OF SEPARATE MINIMUM WAGE FOR TIPPED EMPLOYEES.— 

(1) TIPPED EMPLOYEES.—Section 3(m)(2)(A) of the Fair Labor Standards Act 

of 1938 (29 U.S.C. 203(m)(2)(A)), as amended by subsections (a) and (b), is further amended by striking the sentence beginning with ‘‘In determining the wage 


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an employer is required to pay a tipped employee,’’ and all that follows through 

‘‘of this subsection.’’ and inserting ‘‘The wage required to be paid to a tipped employee shall be the wage set forth in section 6(a)(1).’’. 

(2) PUBLICATION OF NOTICE.—Subsection (i) of section 6 of the Fair Labor 

Standards Act of 1938 (29 U.S.C. 206), as amended by section 5, is further 

amended by striking ‘‘or in accordance with subclause (II) or (III) of section 

3(m)(2)(A)(i)’’. 

(3) EFFECTIVE DATE.—The amendments made by paragraphs (1) and (2) shall 

take effect on the date that is one day after the date on which the hourly wage 

under subclause (III) of section 3(m)(2)(A)(i) of the Fair Labor Standards Act of 

1938 (29 U.S.C. 203(m)(2)(A)(i)), as amended by subsection (a), takes effect. 

SEC. 4. NEWLY HIRED EMPLOYEES WHO ARE LESS THAN 20 YEARS OLD. 

(a) BASE MINIMUM WAGE FOR NEWLY HIRED EMPLOYEES WHO ARE LESS THAN 20 

YEARS OLD.—Section 6(g)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 

206(g)(1)) is amended by striking ‘‘a wage which is not less than $4.25 an hour.’’ 

and inserting the following: ‘‘a wage at a rate that is not less than— 

‘‘(A) for the 1-year period beginning on the effective date under section 7 of 

the Raise the Wage Act, $5.50 an hour; 

‘‘(B) for each succeeding 1-year period until the hourly wage under this paragraph equals the wage in effect under section 6(a)(1) for such period, an hourly 

wage equal to the amount determined under this paragraph for the preceding 

year, increased by the lesser of— 

‘‘(i) $1.25; or 

‘‘(ii) the amount necessary for the wage in effect under this paragraph to 

equal the wage in effect under section 6(a)(1) for such period, rounded up 

to the nearest multiple of $0.05; and 

‘‘(C) for each succeeding 1-year period after the increase made pursuant to 

subparagraph (B)(ii), the minimum wage in effect under section 6(a)(1).’’. 

(b) SCHEDULED REPEAL OF SEPARATE MINIMUM WAGE FOR NEWLY HIRED EMPLOYEES WHO ARE LESS THAN 20 YEARS OLD.— 

(1) IN GENERAL.—Section 6(g) of the Fair Labor Standards Act of 1938 (29 

U.S.C. 206(g)), as amended by subsection (a), shall be repealed. 

(2) PUBLICATION OF NOTICE.—Subsection (i) of section 6 of the Fair Labor 

Standards Act of 1938 (29 U.S.C. 206), as amended by section 3(c)(2), is further 

amended by striking ‘‘or subparagraph (B) or (C) of subsection (g)(1),’’. 

(3) EFFECTIVE DATE.—The repeal and amendment made by paragraphs (1) 

and (2), respectively, shall take effect on the date that is one day after the date 

on which the hourly wage under subparagraph (C) of section 6(g)(1) of the Fair 

Labor Standards Act of 1938 (29 U.S.C. 206(g)(1)), as amended by subsection 

(a), takes effect. 

SEC. 5. PUBLICATION OF NOTICE. 

Section 6 of the Fair Labor Standards Act of 1938 (29 U.S.C. 206), as amended 

by the preceding sections, is further amended by adding at the end the following: 

‘‘(i) Not later than 60 days prior to the effective date of any increase in the required wage determined under subsection (a)(1) or subparagraph (B) or (C) of subsection (g)(1), or in accordance with subclause (II) or (III) of section 3(m)(2)(A)(i) or 

section 14(c)(1)(A), the Secretary shall publish in the Federal Register and on the 

website of the Department of Labor a notice announcing each increase in such required wage.’’. 

SEC. 6. PROMOTING ECONOMIC SELF-SUFFICIENCY FOR INDIVIDUALS WITH DISABILITIES. 

(a) WAGES.— 

(1) TRANSITION TO FAIR WAGES FOR INDIVIDUALS WITH DISABILITIES.—Subparagraph (A) of section 14(c)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 

214(c)(1)) is amended to read as follows: 

‘‘(A) at a rate that equals, or exceeds, for each year, the greater of— 

‘‘(i)(I) $4.25 an hour, beginning 1 year after the date the wage rate specified in section 6(a)(1)(A) takes effect; 

‘‘(II) $6.40 an hour, beginning 2 years after such date; 

‘‘(III) $8.55 an hour, beginning 3 years after such date; 

‘‘(IV) $10.70 an hour, beginning 4 years after such date; 

‘‘(V) $12.85 an hour, beginning 5 years after such date; and 

‘‘(VI) the wage rate in effect under section 6(a)(1), on the date that is 6 

years after the date the wage specified in section 6(a)(1)(A) takes effect; or 

‘‘(ii) if applicable, the wage rate in effect on the day before the date of 

enactment of the Raise the Wage Act for the employment, under a special 

certificate issued under this paragraph, of the individual for whom the 

wage rate is being determined under this subparagraph,’’. 


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1 Jonathan Grossman, U.S. Dep’t of Labor, Fair Labor Standards Act of 1938: Maximum 

Struggle for a Minimum Wage, U.S. Dep’t of Labor, https://www.dol.gov/general/aboutdol/ history/flsa1938. 

(2) PROHIBITION ON NEW SPECIAL CERTIFICATES; SUNSET.—Section 14(c) of the 

Fair Labor Standards Act of 1938 (29 U.S.C. 214(c)) (as amended by paragraph 

(1)) is further amended by adding at the end the following: 

‘‘(6) PROHIBITION ON NEW SPECIAL CERTIFICATES.—Notwithstanding paragraph 

(1), the Secretary shall not issue a special certificate under this subsection to 

an employer that was not issued a special certificate under this subsection before the date of enactment of the Raise the Wage Act. 

‘‘(7) SUNSET.—Beginning on the day after the date on which the wage rate 

described in paragraph (1)(A)(i)(VI) takes effect, the authority to issue special 

certificates under paragraph (1) shall expire, and no special certificates issued 

under paragraph (1) shall have any legal effect. 

‘‘(8) TRANSITION ASSISTANCE.—Upon request, the Secretary shall provide— 

‘‘(A) technical assistance and information to employers issued a special 

certificate under this subsection for the purposes of— 

‘‘(i) transitioning the practices of such employers to comply with this 

subsection, as amended by the Raise the Wage Act; and 

‘‘(ii) ensuring continuing employment opportunities for individuals 

with disabilities receiving a special minimum wage rate under this subsection; and 

‘‘(B) information to individuals employed at a special minimum wage rate 

under this subsection, which may include referrals to Federal or State entities with expertise in competitive integrated employment.’’. 

(3) EFFECTIVE DATE.—The amendments made by this subsection shall take effect on the date of enactment of this Act. 

(b) PUBLICATION OF NOTICE.— 

(1) AMENDMENT.—Subsection (i) of section 6 of the Fair Labor Standards Act 

of 1938 (29 U.S.C. 206), as amended by section 4(b)(2), is further amended by 

striking ‘‘or section 14(c)(1)(A),’’. 

(2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall take effect on the day after the date on which the wage rate described in paragraph 

(1)(A)(i)(VI) of section 14(c) of the Fair Labor Standards Act of 1938 (29 U.S.C. 

214(c)), as amended by subsection (a)(1), takes effect. 

SEC. 7. GENERAL EFFECTIVE DATE. 

Except as otherwise provided in this Act or the amendments made by this Act, 

this Act and the amendments made by this Act shall take effect— 

(1) subject to paragraph (2), on the first day of the third month that begins 

after the date of enactment of this Act; and 

(2) with respect to the Commonwealth of the Northern Mariana Islands, on 

the date that is 18 months after the effective date described in paragraph (1). 

SEC. 8. GAO REPORT. 

Not later than 1 year after the date of enactment of this Act, the Comptroller 

General shall submit to the Education and Labor Committee of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the 

Senate a report that, with respect to the Commonwealth of the Northern Mariana 

Islands— 

(1) assesses the status and structure of the economy (including employment, 

earnings and wages, and key industries); and 

(2) for each year in which a wage increase will take effect under subsection 

(a)(1) or (g)(1) of section 6, section 3(m)(2)(A)(i), or section 14(c)(1)(A) of the Fair 

Labor Standards Act of 1938 (29 U.S.C. 201 et seq.), as amended by this Act, 

estimates the proportion of employees who will be directly affected by each such 

wage increase taking effect for such year, disaggregated by industry and occupation. 

PURPOSE AND SUMMARY

In 1938, President Franklin D. Roosevelt signed into law the 

Fair Labor Standards Act of 1938 (FLSA), landmark legislation 

that established a minimum hourly wage, set maximum hours 

standards, and banned oppressive child labor.1 The minimum wage 

was established as a living wage—an essential protection for workers in the wake of the Great Depression when employers were 


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2 Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697, 706–07 (1945) (‘‘The legislative history of the 

Fair Labor Standards Act shows an intent on the part of Congress to protect certain groups of 

the population from substandard wages and excessive hours which endangered the national 

health and well-being and the free flow of goods in interstate commerce. The statute was a recognition of the fact that due to the unequal bargaining power as between employer and employee, certain segments of the population required federal compulsory legislation to prevent private contracts on their part which endangered national health and efficiency and as a result 

the free movement of goods in interstate commerce.’’). 3David Cooper, Raising the Minimum Wage to $15 by 2024 Would Lift Pay for Nearly 40 Million American Workers 2 (2019), https://www.epi.org/files/pdf/160909.pdf. 4 Calculation estimated based on working 40 hours a week and 52 weeks a year. 

5 U.S. Dep’t of Health and Human Servs., 2019 Poverty Guidelines, https://aspe.hhs.gov/2019- 

poverty-guidelines. 6David Cooper, Raising the Minimum Wage to $15 by 2024 Would Lift Pay for Nearly 40 Million American Workers 14 (2019), https://www.epi.org/files/pdf/160909.pdf (indexing the minimum wage to median wages would ensure that low-wage workers share in broad improvements 

in U.S. living standards and would help prevent future growth in inequality between low- and 

middle-wage workers). 

slashing wages and increasing hours. Congress intended to prevent 

employers from competing on the backs of workers by lowering 

wage costs, based on the understanding that the uneven bargaining 

power between workers and employers could lead workers to accept 

wages too low to maintain a decent standard of living.2

Congress has legislated increases nine times during the 80 years 

since the FLSA’s inception, effectuating 22 increases in the federal 

minimum wage. However, over the last 40 years Congress has 

failed to sufficiently raise the federal minimum wage enough to 

maintain a standard of living. This, combined with a 10 year lapse 

in the last increase in the federal minimum wage, has severely 

eroded the value of the minimum wage. Today’s minimum wage 

workers earn almost $3 per hour less, adjusted for inflation, than 

their counterparts over 50 years ago, despite being significantly 

more productive.3 An individual earning the current federal minimum wage of $7.25 an hour and working full time earns only 

$15,080 annually.4 This income level puts a family of two below the 

federal poverty level and a family of three or four well below the 

federal poverty level ($16,910 a year for a two-person family in 

2018; $21,330 a year for a three-person family; $25,750 for a fourperson family ).5 H.R. 582, the Raise the Wage Act (the Act), would 

restore the value of the federal minimum wage and ensure that 

minimum wage workers no longer earn poverty level wages. 

H.R. 582 increases the federal minimum wage to $15 by 2024 in 

six steps. After reaching $15 an hour, the legislation indexes future 

increases in the federal minimum wage to median wage growth to 

ensure the value of the minimum wage does not once again erode 

over time.6 The Act guarantees tipped workers and teenaged workers are paid at least the full federal minimum wage by gradually 

repealing the subminimum wage for tipped workers and the rarely 

used subminimum wage for teenage workers. The Act also ends 

rarely used subminimum wage certificates for individuals with disabilities. 

Gradually raising the federal minimum wage from $7.25 to $15 

by 2024 over six steps will raise wages for nearly 40 million workers. In this way, this legislation will lift millions of workers out of 

poverty, stimulate local economies, and benefit businesses. 


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COMMITTEE ACTION

110TH CONGRESS

On January 4, 2007, Senator Harry Reid (D–NV) introduced S. 

2, the Fair Minimum Wage Act of 2007, which would have raised 

the federal minimum wage from $5.15 to $5.85 60 days after enactment, to $6.55 one year after the effective date, and to $7.25 two 

years after the effective date. It had 41 Democratic cosponsors, one 

Independent cosponsor, and one Independent Democrat cosponsor. 

On January 5, 2007, Congressman George Miller (D–CA–7) introduced the House companion bill, H.R. 2, the Fair Minimum Wage 

Act of 2007. It had 214 Democratic cosponsors and 8 Republican cosponsors. It was referred to the House Committee on Education 

and Labor. The House passed H.R. 2 by a vote of 315–116 on January 10, 2007. 

On January 16, 2007, the Senate Committee on Health Education Labor and Pensions (Senate HELP Committee) held a hearing on raising the minimum wage titled, ‘‘Economic Opportunity 

and Security for Working Families.’’ The Senate HELP Committee 

heard testimony from Dr. Eileen Applebaum, Professor and Director, Center for Women and Work at Rutgers University; Reverend 

Dr. James Alexander Forbes Jr., Senior Minister, The Riverside 

Church; Dr. Jacob Hacker, Associate Professor, Yale University; 

and Mrs. Anna Cablik, President, ANATEK, Inc. 

On January 22, 2007, H.R. 2 was brought before the Senate by 

unanimous consent. On February 1, 2007 the Senate passed H.R. 

2, as amended, by a vote of 94–3. 

On March 27, 2007, Senator Edward M. Kennedy (D–MA) offered 

an amendment to H.R. 1591, the U.S. Troop Readiness, Veterans’ 

Care, Katrina Recovery, and Iraq Accountability Appropriations 

Act, 2007, to include the text of the Fair Minimum Wage Act and 

separate tax provisions. The amendment passed and H.R. 1591 was 

passed by the Senate on March 29, 2007, by a vote of 51–47. On 

April 24, 2007, House and Senate conferees agreed to a conference 

report, H. Report 110–17, which included the text of the Kennedy 

Amendment. The House agreed to the conference report on April 

25, 2007 by a vote of 218–208, and the Senate agreed to the report 

the next day by a vote of 51–46. On May 1, 2007, President Bush 

vetoed H.R. 1591. On May 2, 2007, the House failed to override the 

President’s veto by a vote of 222–203. 

On May 8, 2007, Congressman David R. Obey (D–WI–7) introduced H.R. 2206, the U.S. Troop Readiness, Veterans’ Care, Katrina 

Recovery, and Iraq Accountability Appropriations Act, 2007. The 

bill was passed by the House on May 10, 2007 by a vote of 221– 

205. The bill was then passed by the Senate on a voice vote on May 

17, 2007. The President signed H.R. 2206 on May 25, 2007. It became Pub. L. No. 110–28. 

On December 13, 2007, Congressman Al Green (D–TX–9) introduced H.R. 4637, the Living American Wage (LAW) Act of 2007. 

The bill would have required the federal minimum wage to be adjusted every four years to a level equal to five percent above the 

wage level necessary for a full-time worker to earn above the poverty threshold for a family of three. The bill had no cosponsors and 

was referred to the House Committee on Education and Labor. No 

further action was taken on this bill. 


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111TH CONGRESS

On May 21, 2009, Congresswoman Donna Edwards (D–MD–4) introduced H.R. 2570, the Working for Adequate Gains for Employment in Services (WAGES) Act. The bill would have raised the federal tipped minimum wage to 70 percent of the full federal minimum wage. It had 38 Democratic cosponsors and was referred to 

the House Committee on Education and Labor. No further action 

was taken on this bill. 

On June 25, 2009, Congressman Green (TX–9) introduced H.R. 

3041, the Living American Wage (LAW) Act of 2009. The bill would 

have required the federal minimum wage to be adjusted every four 

years to a level equal to 15 percent above the wage level required 

for a full-time worker to earn above the poverty threshold for a 

family of two. It had four Democratic cosponsors and was referred 

to the House Committee on Education and Labor. No further action 

was taken on this bill. 

112TH CONGRESS

On February 25, 2011, Congressman Green (TX–9) introduced 

H.R. 283, the Living American Wage (LAW) Act of 2011. It had 12 

Democratic cosponsors. It was referred to the House Committee on 

Education and the Workforce, where it was referred to the Subcommittee on Workforce Protections. On June 29, 2012 Congressman Green (TX–9) introduced a new version of the bill as H.R. 

6076, the Original Living American Wage (LAW) Act. Both bills 

would have required the federal minimum wage to be adjusted 

every four years to a level equal to 15 percent above the wage level 

required for a full-time worker to earn above the poverty threshold 

for a family of two. It had no cosponsors and was referred to the 

House Committee on Education and the Workforce, where it was 

referred to the Subcommittee on Workforce Protections. No further 

action was taken on either bill. 

On March 4, 2011, Congresswoman Edwards (MD–4) introduced 

H.R. 631, the Working for Adequate Gains for Employment in Services (WAGES) Act. It would have raised the federal tipped minimum wage to 70 percent of the full federal minimum wage. It had 

34 Democratic cosponsors. It was referred to the House Committee 

on Education and the Workforce, where it was referred to the Subcommittee on Workforce Protections. No further action was taken 

on this bill. 

On July 26, 2012, Senator Tom Harkin (D–IA) and Congressman 

Miller (CA–7) introduced S. 3453 and H.R. 6211, the Fair Minimum Wage Act of 2012, respectively. The bills would have raised 

the federal minimum wage to $8.10 three months after enactment, 

$8.95 one year after the effective date, and $9.80 two years after 

the effective date. The bills would also have indexed future increases in the minimum wage to the Consumer Price Index for all 

Urban Wage Earners and Clerical Workers (CPI–W) and raised the 

tipped minimum wage to 70 percent of the full minimum wage. S. 

3453 had 15 Democratic cosponsors and one Independent cosponsor 

and was referred to the Senate HELP Committee. H.R. 6211 had 

117 Democratic cosponsors and was referred to the House Committee on Education and the Workforce, where it was referred to 


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the Subcommittee on Workforce Protections. No further action was 

taken on either bill. 

113TH CONGRESS

On March 5, 2013, Senator Harkin introduced S. 460, the Fair 

Minimum Wage Act of 2013. It would have raised the federal minimum wage to $8.20 three months after enactment, $9.15 one year 

after the effective date, and $10.10 two years after the effective 

date. The bill would also have indexed future increases in the minimum wage to the CPI–W and raised the tipped minimum wage to 

70 percent of the full minimum wage. It had 32 Democratic cosponsors and one Independent cosponsor. It was referred to the Senate 

HELP Committee. 

The Senate HELP Committee held a hearing on the Fair Minimum Wage Act on March 14, 2013. The hearing was titled ‘‘Keeping up with a Changing Economy: Indexing the Minimum Wage.’’ 

The Senate HELP Committee heard testimony from Mr. Brad 

Avakian, Commissioner with the Oregon Bureau of Labor and Industries; Dr. Arindrajit Dube, Professor of Economics at University 

of Massachusetts Amherst; Mr. Lew Price, Managing Partner of 

Vintage Vinyl; Ms. Carolle Fleurio, a restaurant worker; Mr. Melvin Sickler, Auntie Anne’s Pretzels and Cinnabon Franchisee; and 

Mr. David Rutigigliano, owner of Southport Brewing Company. 

On November 19, 2013, Senator Harkin introduced S. 1737, the 

Minimum Wage Fairness Act. The bill had 38 Democratic cosponsors and one Independent cosponsor. It would have raised the federal minimum wage to $8.20 one year after passage, $9.15 one year 

after the effective date, and $10.10 two years after the effective 

date. The bill would also have indexed future increases in the minimum wage to the CPI–W and raised the tipped minimum wage to 

70 percent of the full minimum wage. The bill was reintroduced by 

Senator Harkin on April 8, 2014, as S. 2223. On April 30, 2014, 

Senator Reid’s cloture motion to proceed on the bill failed by a vote 

of 54–42. Senator Reid moved to reconsider the bill but later withdrew the motion. No further action was taken on the bill. 

On January 14, 2013, Congressman Green (TX–9) introduced 

H.R. 229, the Original Living American Wage (LAW) Act. The bill 

would have required the federal minimum wage to be adjusted 

every four years to a level equal to 15 percent above the wage level 

required for a full-time worker to earn above the poverty threshold 

for a family of two. The bill had eight Democratic cosponsors. It 

was referred to the House Committee on Education and the Workforce, where it was referred to the Subcommittee on Workforce Protections. Congressman Green (TX–9) reintroduced the bill on June 

11, 2014, as H.R. 4839. It had 35 Democratic cosponsors. No further action was taken on either bill. 

On March 6, 2013, Congressman Miller (CA–7) introduced H.R. 

1010, the Fair Minimum Wage Act of 2013. It would have raised 

the federal minimum wage to $8.20 one year after passage, $9.15 

one year after the effective date, and $10.10 two years after the effective date. The bill would also have indexed future increases in 

the minimum wage to the CPI–W and raised the tipped minimum 

wage to 70 percent of the full minimum wage. The bill had 197 

Democratic cosponsors. The bill was referred to the House ComVerDate Sep 11 2014 08:01 Jul 13, 2019 Jkt 089006 PO 00000 Frm 00008 Fmt 6659 Sfmt 6602 E:\HR\OC\HR150.XXX HR150

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mittee on Education and the Workforce, where it was referred to 

Subcommittee on Workforce Protections. 

On March 26, 2013, Congressman Gregg Harper (R–MS–3) introduced H.R. 831, the Fair Wages for Workers with Disabilities Act 

of 2013. The bill would have repealed Section 14(c) of the FLSA 

and phased out the subminimum wage for workers with disabilities 

over three years. The bill had 73 Democratic and 24 Republican cosponsors. The bill was referred to the House Committee on Education and the Workforce, where it was referred to the Subcommittee on Workforce Protections. No further action was taken 

on this bill. 

On April 13, 2013, Congresswoman Edwards (MD–4) introduced 

H.R. 650, the Working for Adequate Gains for Employment in Services (WAGES) Act. It would have raised the federal tipped minimum wage to 70 percent of the full federal minimum wage. The 

bill had 29 Democratic cosponsors. The bill was referred to the 

House Committee on Education and the Workforce, where it was 

referred to the Subcommittee on Workforce Protections. No further 

action was taken on this bill. 

On April 23, 2013, Congressman Alan Grayson (D–FL–9) introduced H.R. 1346, the Catching Up To 1968 Act. It would have immediately raised the federal minimum wage to $10.50, indexed future increases in the minimum wage to the Consumer Price Index 

for All Urban Consumers (CPI–U), raised the tipped minimum 

wage to 70 percent of the full minimum wage, and eliminated exemptions for some agricultural and domestic workers. The bill had 

19 Democratic cosponsors and was referred to the House Committee on Education and the Workforce, where it was referred to 

the Subcommittee on Workforce Protections. No further action was 

taken on this bill. 

On December 12, 2013, Congressman John Larson (D–CT–1) reintroduced the Fair Minimum Wage Act of 2013 as H.R. 3746. It 

would have raised the federal minimum wage to $8.50 three 

months after enactment, $10.00 a year after the effective date, and 

$11.00 two years after the effective date. The bill would also have 

indexed future increases in the minimum wage to the CPI–W and 

raised the tipped minimum wage to 70 percent of the full minimum 

wage. The bill had no cosponsors and was referred to the House 

Committee on Education and the Workforce. No further action was 

taken on the bill. 

On January 28, 2014, Congressman Richard Neal (D–MA–1) introduced H.R. 3939, the Invest in United States Act of 2014. It had 

one Democratic cosponsor and was referred to the House Committees on Ways and Means, Transportation and Infrastructure, and 

Education and the Workforce. It would have raised the federal minimum wage to $8.20 one year after passage, $9.15 one year after 

the effective date, and $10.10 two years after the effective date. 

The bill would also have indexed future increases in the minimum 

wage to the CPI–W and raised the tipped minimum wage to 50 

percent of the full minimum wage. In the House Committee on 

Education and the Workforce, it was referred to the Subcommittee 

on Workforce Protections. No further action was taken on this bill. 

On February 26, 2014, Congressman Timothy Bishop (D–NY–1) 

filed a motion to discharge H.R. 1010 from the House Committee 


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on Education and the Workforce. The discharge petition gained 196 

signatures, short of the 218 signatures needed for further action. 

114TH CONGRESS

On January 6, 2015, Congressman Green (TX–9) introduced H.R. 

122, the Original Living Wage Act of 2015. The bill would have required the federal minimum wage to be adjusted every four years 

to a level equal to 15 percent above the wage level required for a 

full-time worker to earn above the poverty threshold for a family 

of two. It had 18 Democratic cosponsors and was referred to the 

House Committee on Education and the Workforce, where it was 

referred to the Subcommittee on Workforce Protections. The bill 

was later incorporated into H.R. 2721, the Pathways Out of Poverty 

Act of 2015, introduced by Congresswoman Barbara Lee (D–CA–13) 

on June 10, 2015. H.R. 2721 was referred to the House Committee 

on Education and the Workforce, where it was referred to the Subcommittee on Higher Education and Workforce Training. No further action was taken on either bill. 

On January 7, 2015, Congressman Harper (MS–3) introduced 

H.R. 188, the Transitioning to Integrated and Meaningful Employment (TIME) Act. The bill would have repealed Section 14(c) of the 

FLSA and phased out the subminimum wage for workers with disabilities over three years. The bill had 59 Democratic and 24 Republican cosponsors and was referred to the House Committee on 

Education and the Workforce, where it was referred to the Subcommittee on Workforce Protections. On August 5, 2015, Senator 

Kelly Ayotte (R–NH) introduced the Senate companion, S. 2001, 

the Transitioning to Integrated and Meaningful Employment 

(TIME) Act. The bill was referred to the Senate HELP Committee. 

No further action was taken on either bill. 

On April 30, 2015, Senator Patty Murray (D–WA) introduced S. 

1150, the Raise the Wage Act. S. 1150 had 33 Democratic cosponsors and was referred to the Senate HELP Committee. On the 

same day Congressman Robert C. ‘‘Bobby’’ Scott (D–VA–3) introduced the House companion bill, H.R. 2150. H.R. 2150 had 175 

Democratic cosponsors and was referred to the House Committee 

on Education and the Workforce, where it was referred to the Subcommittee on Workforce Protections. The bills would have raised 

the federal minimum wage to $8.00 30 days after enactment, $9.00 

one year later, $10.00 two years later, $11.00 three years later, and 

$12.00 four years later. The bill would also have indexed future increases in the minimum wage to changes in median wages and 

eliminated the tipped minimum wage. No further action was taken 

on either bill. 

On July 22, 2015, Senator Bernard Sanders (I–VT) introduced S. 

1832, the Pay Workers a Living Wage Act. S. 1832 had five Democratic cosponsors and was referred to the Senate HELP Committee. 

On the same day Congressman Keith Ellison (D–MN–5) introduced 

the House companion bill, H.R. 3164. H.R. 3164 had 56 Democratic 

cosponsors and was referred to the House Committee on Education 

and the Workforce, where it was referred to the Subcommittee on 

Workforce Protections. The bills would have raised the federal minimum wage to $9.00 in the first year after passage, $10.50 a year 

after the effective date, $12.00 two years after the effective date, 

$13.50 three years after the effective date, and $15.00 four years 


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after the effective date. The bill would also have indexed future increases in the minimum wage to changes in median wages, eliminated the tipped minimum wage, and increased the youth subminimum wage rate. No further action was taken on either bill. 

On February 9, 2016, Congressman Donald Norcross (D–NJ–1) 

introduced H.R. 4508, the Fair Wage Act. The bill would have 

raised the federal minimum wage to $8.00 30 days after enactment, 

$9.00 one year later, $10.00 two years later, $11.00 three years 

later, $12.00 four years later, $13.00 five years later, $14.00 six 

years later, and $15.00 seven years later, and would index future 

increases in the minimum wage to increases in the CPI–W. It had 

three Democratic cosponsors. It was referred to the House Committees on Education and the Workforce and Ways and Means. In the 

House Committee on Education and the Workforce, it was referred 

to the Subcommittee on Workforce Protections. No further action 

was taken on this bill. 

115TH CONGRESS

On January 3, 2017, Congressman Green (TX–9) introduced H.R. 

122, the Original Living Wage Act of 2017. The bill would have required the federal minimum wage to be adjusted every four years 

to a level equal to 15 percent above the wage level required for a 

full-time worker to earn above the poverty threshold for a family 

of four. It had 10 Democratic cosponsors and was referred to the 

House Committee on Education and the Workforce. No further action was taken on this bill. 

On March 7, 2017, Congressman Harper (MS–3) introduced 

H.R.1377, the Transitioning to Integrated and Meaningful Employment Act of 2017. The bill would have repealed Section 14(c) of the 

FLSA and phased out the subminimum wage for workers with disabilities over six years. The bill had 37 Democratic and 15 Republican cosponsors. It was referred to the House Committee on Education and the Workforce. No further action was taken on this bill. 

On May 11, 2018, Congressman Cedric Richmond (D–LA–2) introduced H.R. 5785, the Jobs with Justice Act of 2018. The bill 

would have raised federal minimum wage to $9.25 on the effective 

date, $10.10 beginning one year later, $11.00 two years later, 

$12.00 three years later, $13.00 four years later, $13.50 five years 

later, $14.25 six years later, and $15.00 seven years later. The bill 

also would have indexed future increases in the minimum wage to 

increases in median wages and eliminated subminimum wages for 

young workers, workers receiving tips, and workers with disabilities. The bill had 44 Democratic cosponsors. The bill was referred 

to the House Committees on Judiciary; Oversight and Government 

Reform; Financial Services; Transportation and Infrastructure; 

Ways and Means; Energy and Commerce; Budget; Education and 

the Workforce; Science, Space, and Technology; Veterans’ Affairs; 

Homeland Security; Armed Services; Small Business; House Administration; and Agriculture. No further action was taken on this 

bill. 

On May 25, 2017, Senator Sanders (I–VT) introduced S. 1242, 

the Raise the Wage Act. S. 1242 had 31 Democratic cosponsors and 

was referred to the Senate HELP Committee. On the same day 

Congressman Scott (VA–3) introduced the House companion bill, 

H.R. 15. H.R. 15 had 171 Democratic cosponsors and was referred 


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to the House Committee on Education and the Workforce. The bills 

would have raised federal minimum wage to $9.25 on the effective 

date, $10.10 beginning one year later, $11.00 two years later, 

$12.00 three years later, $13.00 four years later, $13.50 five years 

later, $14.25 six years later, and $15.00 seven years later. The bills 

would also have indexed future increases in the minimum wage to 

increases median wages and eliminated the subminimum wages for 

young workers, tipped workers, and workers with disabilities. No 

further action was taken on either bill. 

116TH CONGRESS

On January 3, 2019, Congressman Green (TX–9) introduced H.R. 

122, the Original Living Wage Act with no cosponsors. The bill 

would have required the federal minimum wage to be adjusted 

every four years to a level equal to 25.5 percent above the wage 

level required for a full-time worker to earn above the poverty 

threshold for a family of four. It was referred to the House Committee on Education and Labor. No further action has been taken 

on this bill. 

On January 16, 2019, Senator Sanders (I–VT) introduced S.150, 

the Raise the Wage Act. S. 150 was introduced with 30 cosponsors 

and was referred to the Senate HELP Committee. No further action has been taken on this bill. On the same day Congressman 

Scott (VA–3) introduced the House companion bill, H.R. 582. 

H.R. 582 has 205 cosponsors, including 188 original cosponsors. 

The bill was referred to the House Committee on Education and 

Labor (hereinafter, the Committee). On February 7, 2019, the Committee held a legislative hearing entitled, ‘‘Gradually Raising the 

Minimum Wage to $15: Good for Workers, Good for Businesses, and 

Good for the Economy’’ (hereinafter, the February 7th hearing). 

Witnesses included Dr. William Spriggs, Professor at Howard University and Chief Economist for the AFL–CIO; Mr. Terrence Wise, 

a shift manager at McDonald’s; Dr. Douglas Holtz-Eakin, President 

of the American Action Forum; Dr. Ben Zipperer, Economist at the 

Economic Policy Institute; Ms. Vanita Gupta, President and CEO 

of the Leadership Conference on Civil and Human Rights; Ms. 

Simone Barron, restaurant worker at a full service restaurant; Ms. 

Kathy Eckhouse, owner of La Quercia; Dr. Michael Strain, Resident Scholar and Director of Economic Policy Studies at the American Enterprise Institute; Dr. Michael Reich, Professor of Economics at University of California Berkeley; and Mr. Paul Brodeur, 

Massachusetts State Representative. 

On Wednesday, March 6, 2019, the Committee met for a full 

committee markup of H.R. 582, the Raise the Wage Act. The Committee adopted an amendment in the nature of a substitute (ANS) 

offered by Congressman Scott (VA–3), Chairman of the Committee, 

and reported the bill favorably to the House of Representatives by 

a vote of 28–20. 

The ANS incorporates the provisions of H.R. 582 with the following modifications: 

• It amends Section 4 to clarify H.R. 582’s language to fully 

repeal Section 6(g) of the FLSA by striking FLSA subsections 

6(g)(2)–(5). These provisions were added to the FLSA by Pub. 

L. No. 114–187, the Puerto Rico Oversight, Management, and 

Economic Stability Act (PROMESA). PROMESA increased the 


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age under which a worker in Puerto Rico may be paid the 

youth minimum wage from 20 to the age of 25. The law also 

allowed the Governor of Puerto Rico to increase the allowable 

length of time that an employer can pay the youth subminimum wage for up to five years. The ANS removes these provisions from the underlying statute. 

• It amends Section 7 to set the effective date in the Commonwealth of the Northern Mariana Islands (CNMI) as 18 

months after the bill’s general effective date. 

• It adds Section 8, requiring the Comptroller General (Government Accountability Office or GAO) to review the economic 

conditions in the CNMI, estimate the proportion of employees 

directly affected by such wage increase (disaggregated by industry and occupation), and submit a report to Congress within 

one year after enactment. 

The following amendments to the ANS were offered, but not 

adopted: 

• Congressman Ben Cline (R–VA–6) offered an amendment 

to prohibit minimum wage increases under the Act from taking 

effect if, during the year prior to the effective date: (1) monthly 

employment growth is negative for 3 consecutive months; (2) 

total non-farm unemployment increases by more than 0.25 percent in a month; or (3) the national unemployment rate is 

above 6 percent in a month. The amendment failed by a vote 

of 19–28. 

• Congressman Dan Meuser (R–PA–9) offered an amendment to exclude enterprises with fewer than ten employees or 

less than $1 million in annual gross volume of sales from minimum wage increases under the Act. The amendment failed by 

a vote of 21–24. 

• Congressman Rick Allen (R–GA–12) offered an amendment to prohibit minimum wage increases under the Act unless the unemployment rate for individuals aged 16 to 24 is 

below 8 percent for each of the 12 months prior to the effective 

dates for such increases. The amendment failed by a vote of 

20–28. 

• Congressman Lloyd Smucker (R–PA–11) offered an 

amendment to prohibit state and local governments from 

adopting a minimum wage requirement if an employer is exempt from such a requirement for employees covered by a bona 

fide collective bargaining agreement. The amendment failed by 

a vote of 20–28. 

• Congresswoman Virginia Foxx (R–NC–5), Ranking Member of the Committee, offered an amendment to strike provisions setting the effective date in the CNMI. The amendment 

failed by a vote of 20–28. 

• Congressman Ron Wright (R–TX–6) offered an amendment 

to prohibit the Act from taking effect unless (1) the Comptroller General (Government Accountability Office or GAO) 

submits a report to Congress, no later than 1 year after the 

date of enactment, on the Act’s impact on employment and automation, and (2) such report finds that the Act will not result 

in the loss of more than 500,000 jobs due to automation. The 

amendment failed by a vote of 21–27. 


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7 Jonathan Grossman, Fair Labor Standards Act of 1938: Maximum Struggle for a Minimum 

Wage, 101 Monthly Labor Review 22-30 (1978), available at https://www.jstor.org/stable/ 

41840777. 8 Id. 

9 President Franklin D. Roosevelt, Statement the National Industrial Recovery Act (June 16, 

1933), Franklin D. Roosevelt Presidential Library, http://docs.fdrlibrary.marist.edu/ 

odnirast.html. 10 Id. 

• Congressman Phil Roe (R–TN–1) offered an amendment to 

prohibit the Act from taking effect unless (1) the Comptroller 

General (Government Accountability Office or GAO) submits a 

report to Congress, no later than 1 year after the date of enactment, on the Act’s impact on areas with a median hourly wage 

less than $18, and (2) such report finds that the Act will not 

result in the loss of more than 200,000 jobs in such areas. The 

amendment failed by a vote of 20–27. 

COMMITTEE VIEWS

The Committee is committed to restoring the value of the federal 

minimum wage and ensuring that all workers, regardless of where 

they work, are able to earn a fair day’s pay for a fair day’s work. 

Gradually raising the minimum wage is good for workers, who experience a better standard of living; good for businesses, which benefit from an expanded customer base and less worker turnover; and 

good for the economy, which is strongest when policy reduces poverty and promotes a thriving middle class. 

THE HISTORY OF THE MINIMUM WAGE UNDER THE FAIR LABOR

STANDARDS ACT

The Federal minimum wage was established as a living wage with 

workers of color excluded 

On June 25, 1938, President Roosevelt signed the FLSA, landmark legislation that established a minimum hourly wage, set 

maximum hours standards, and banned oppressive child labor.7

Passed as part of the New Deal, this legislation was enacted to ensure that all workers had a minimum living standard. In 1937, 

President Roosevelt declared that ‘‘[a] self-supporting and self-respecting democracy can plead no justification for the existence of 

child labor, no economic reason for chiseling workers’ wages or 

stretching workers’ hours.’’ 8

The minimum wage was established as a living wage as an essential protection for workers in the wake of the Great Depression 

when employers were slashing wages and increasing hours. Recognizing rampant abuses of workers, President Roosevelt quipped in 

1933, ‘‘[n]o business which depends for existence on paying less 

than living wages to its workers has any right to continue in this 

country.’’ 9 He went on to clarify, ‘‘by ‘business’ I mean the whole 

of commerce as well as the whole of industry; by workers I mean 

all workers, the white-collar class as well as the men in overalls; 

and by living wages, I mean more than a bare subsistence level— 

I mean the wages of decent living.’’ 10 Five years before he signed 

the FLSA into law, President Roosevelt made it apparent that the 

minimum wage was never intended to be merely an entry-level 

wage, but rather a floor at which Americans could be paid and still 

live comfortably. 


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11 H. Rept. No. 75–2182, at 6 (1938). 12Sean Farhang & Ira Katznelson, The Southern Imposition: Congress and Labor in the New 

Deal and Fair Deal 14 (2005), https://gspp.berkeley.edu/assets/uploads/research/pdf/articlel4.pdf. 13 Id. 14Sean Farhang & Ira Katznelson, The Southern Imposition: Congress and Labor in the New 

Deal and Fair Deal 15 (2005), https://gspp.berkeley.edu/assets/uploads/research/pdf/articlell4.pdf. 15 Id. 

The 1938 House Committee on Labor further elucidated this 

need for the minimum wage to be a living wage: 

Unless the wages paid by private employers are sufficient to maintain the bare cost of living, [sic] demands [on 

the state and federal government for work and work relief] 

will necessarily continue. The payment of oppressive 

wages is not only detrimental to interstate commerce and 

to the health and well-being of employees of employers engaged in interstate commerce, but also casts a direct burden for the support of such employees upon Government. 

Government cannot indefinitely provide what is in effect a 

subsidy for such employers—a subsidy made necessary by 

the inability of the great majority of such employers to 

maintain fair labor standards in the face of wage cuts by 

chiseling competitors.11

Although the federal minimum wage was established to ensure 

workers had livable wages, unfortunately, as first passed, the 

FLSA contained broad exclusions aimed at depriving workers of 

color of minimum wage protections. During debate on the FLSA, 

some Southern Members of Congress expressed their opposition to 

a federal minimum wage on the ground that it threatened to equalize wages between African American and White laborers.12 For example, Congressman Mark Wilcox (D–FL–4) stated during floor debate: 

We may rest assured, therefore, that when we turn over 

to a federal bureau or board the power to fix wages, it will 

prescribe the same wage for the Negro that it prescribes 

for the [W]hite man. Now, such a plan might work in some 

sections of the United States but those of us who know the 

true situation know that it just will not work in the 

South.13

As a compromise to secure votes from Southern lawmakers, the 

FLSA, as passed in 1938, excluded industries in which people of 

color were the majority of the workforce, including agriculture and 

domestic work. In 1930, approximately 58 percent of Black workers 

in the South were agricultural or domestic workers.14 Southern 

lawmakers understood that, by carving out agricultural and domestic workers from the FLSA, they undermined the leveling effects of 

a federal minimum and could thereby ‘‘maintain the relation of inequality between the races in massive sectors of southern labor 

markets in which blacks were densely concentrated.’’ 15 While many 

of the FLSA exclusions for domestic and agriculture workers have 

since been removed, the effects of these exclusions remain. 


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16David Cooper, Raising the Minimum Wage to $15 by 2024 Would Lift Pay for Nearly 40 

Million American Workers 2 (2019), https://www.epi.org/files/pdf/160909.pdf. 17Fair Minimum Wage Act of 2007, H.R. 2, 110th Cong. (2007). 18 153 Cong. Rec. H260 (2007) (daily ed. Jan. 10, 2007) (Roll Call 18). 19 29 U.S.C. § 206(a)(1)(C). 

Past increases to the minimum wage were more frequent 

Since 1938, Congress has passed legislation that increases the 

federal minimum wage nine times—four of those in the last 40 

years.16 Congressional action has effectuated a federal minimum 

wage increase 22 times. Up until 2009, the most recent year the 

minimum wage increased, an average of three years passed between minimum wage adjustments. As shown in Table 1, for only 

seven of the 22 increases in the last 80 years has more than five 

years passed between minimum wage increases. Because Congress 

has not raised the federal minimum wage, on June 16, 2019, the 

nation entered the longest period of time that the federal minimum 

wage has gone unchanged in the law’s 80-year history. 

Congress last legislated an increase in the federal minimum 

wage in 2007 during the George W. Bush Administration with 

Democratic control of the House and Senate. H.R. 2, The Fair Minimum Wage Act of 2007, was introduced by then-Chairman of the 

House Education and Labor Committee, Congressman George Miller (D–CA–11), with 214 original cosponsors.17 H.R. 2 passed the 

House as a stand-alone bill on January 10, 2007 by a vote of 315– 

116. Notably, 82 Republicans voted in favor of the bill.18 Ultimately, the provisions in the bill were included in Pub. L. No. 110– 

28, the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, 

and Iraq Accountability Appropriations Act, 2007, enacted May 25, 

2007. Pursuant to the legislation, the federal minimum wage increased over three years from $5.15 to $5.85 in 2007, to $6.55 in 

2008, and to $7.25 in 2009 (an increase of $0.70 per hour each 

year). The minimum wage has remained at $7.25 per hour since 

July 24, 2009.19


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F66590 


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21David Cooper, Over 5 Million Workers Will have Higher Pay on January 1 Thanks to State 

Minimum Wage Increases, Working Econs. Blog (Dec. 26, 2018, 5:00 AM), https://www.epi.org/ 

blog/over-5-million-workers-will-have-higher-pay-on-january-1-thanks-to-state-minimum-wageincreases/. 22 Bureau of Labor Statistics Rep. No. 1072, Characteristics of Minimum Wage Workers 2017 

1 (2018), https://www.bls.gov/opub/reports/minimum-wage/2017/pdf/home.pdf. 23 Id. 24David Cooper, One in nine U.S. workers are paid wages that can leave them in poverty, even 

when working full time, Econ. Snapshot (June 15, 2018), https://www. epi. org/publication/onein-nine-u-s-workers-are-paid-wages-that-can-leave-them-in-poverty-even-when-workingfull-time/. 25Gradually Raising the Minimum Wage to $15: Good for Workers, Good for Businesses, and 

Good for the Economy Before H. Comm. on Educ. and Labor, 116th Cong. (2019) (written testimony of Ben Zipperer, Economist at the Econ. Policy Inst., at 3) [Hereinafter ‘‘Zipperer Testimony’’]. 26 Josh Bivens et al., How Today’s Unions Help Working People, Econ. Policy Inst. 9 (2017), 

https://www.epi.org/publication/how-todays-unions-help-working-people-giving-workers-theDespite congressional inaction, 29 states and the District of Columbia have minimum wages higher than the federal minimum 

wage (as of April 2019). Additionally, 41 localities have minimum 

wages higher than their state’s minimum wage. Since 2014, 25 

states and the District of Columbia have changed their minimum 

wage laws. Seven of these states—California, Connecticut, Illinois, 

Massachusetts, New Jersey, New York, and Maryland—have enacted laws phasing in a $15 per hour minimum wage. On January 

1, 2019, nineteen states raised their minimum wages through previously approved legislation, newly approved ballot initiatives, or 

automatic inflationary adjustments. These increases will provide 

an estimated 5.2 million workers with an additional $5.3 billion in 

wages over the course of 2019.21

THE DECLINING VALUE OF THE FEDERAL MINIMUM WAGE HAS

CONTRIBUTED TO WAGE STAGNATION

Low-wage workers comprise a significant portion of the U.S. 

workforce; this group of workers includes those who earn the minimum wage or less, as well as those who earn poverty-level and 

near-poverty-level wages. According to the BLS, 1.8 million workers, or 2.3 percent of all workers, earn wages at or below the federal minimum wage (some earn less than the minimum due to 

FLSA coverage exemptions).22 The majority (51 percent) of these 

workers are over the age of 25, overwhelmingly women (60 percent), and disproportionately workers of color (nearly 40 percent).23

Beyond those earning the federal minimum wage are the one in 

nine U.S. workers who are paid wages that leave them in poverty, 

even when working full time and year-round.24 There is no precise 

definition of a low wage worker, but as Dr. Zipperer testified at the 

February 7th hearing, ‘‘[m]ore broadly low-wage workers today constitute a large portion of the workforce. About [sic] 25 percent of 

all workers earned $13 or less per hour in 2018 and the vast majority of them would benefit from a minimum wage increase to $15 

by 2024.’’ 25

The federal minimum wage impacts low-wage workers by setting 

a wage floor. For low-wage workers, the institution of a federal 

minimum wage may be one of the few mechanisms providing upward pressure on their wages. This is especially true where a decline of union membership has meant a smaller percentage of the 

U.S. workforce has its wages set through collective bargaining. 

Union density has decreased from 33.2 percent in 1956 to 10.7 percent of the workforce in 2017,26 limiting workers’ bargaining power. 


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power-to-improve-their-jobs-and-unrig-the-economy/; Bureau of Labor Statistics, Union Membership (Annual) News Release, Econ. News Release (Jan. 18, 2019, 10:00 AM), https://www.bls.gov/ 

news.release/union2.htm. 27David Cooper, Congress has never let the federal minimum wage erode for this long, Econ. 

Snapshot (Jun. 17, 2019), https://www.epi.org/publication/congress-has-never-let-the-federal-minimum-wage-erode-for-this-long/. 28 Rachel West, March 1 is Minimum Wage Workers’ Equal Pay Day, Ctr. for Am. Progress 

(Mar. 1, 2018, 10:00 AM), https://www.americanprogress.org/issues/poverty/news/2018/03/01/ 

447359/march-1-minimum-wage-workers-equal-pay-day/. 29 Econ. Policy Inst., The Productivity-Pay Gap, https://www.epi.org/productivity-pay-gap/. 30Zipperer Testimony at 2 (See 45:15). 31 Economic Policy Institute’s analysis of the Fair Labor Standards Act and amendments. 

Based on the average hourly wages of production nonsupervisory workers from the Bureau of 

Labor statistics Current Employment Statistics. 32 Cooper, supra note 3, at 2. 33Zipperer Testimony at 2. 34 Cooper, supra note 3, at 6 (For full-time, full-year workers). 

In the 1980s, the real value of the minimum wage dropped as 

federal increases failed to keep up with inflation. Federal increases 

in the 1990s also failed to compensate for this erosion. Even the 

three consecutive $0.70 per hour increases implemented in 2007, 

2008, and 2009 failed to restore the inflation-adjusted value of the 

minimum wage to its pre-1980 levels. Since the last minimum 

wage increase to $7.25 an hour in 2009, the value of the minimum 

wage has fallen by 17 percent.27 This means that ‘‘[i]n 2018, a 

worker earning $7.25 per hour needs an extra 41 working days 

more than eight weeks—just to take home the same pay as she did 

in a single year when the federal minimum wage was last increased.’’ 28

The minimum wage has also failed to keep up with increases in 

worker productivity. Between 1973 and 2017, workers’ productivity 

grew by 77 percent, while the typical worker’s hourly wages grew 

by just 12 percent in real terms.29 The widening gap between how 

much workers produce and how much they are paid is one major 

factor contributing to the historic levels of income inequality. Had 

the minimum wage kept pace with worker productivity, as it once 

did, it would be more than $20 per hour today.30 Had the value of 

the federal minimum wage in 1968, its historical high point, simply 

grown at the rate of average wages, it would be approximately $12 

per hour today.31

As a direct result of the decline in the value of the minimum 

wage, hourly pay for workers earning the federal minimum wage 

has declined in real terms since 1979. Today’s minimum wage 

workers earn nearly $3 an hour less, adjusted for inflation, than 

their counterparts over 50 years ago earned, despite being significantly more productive.32 This means workers are making 29 percent less in real terms than what their counterparts made nearly 

50 years ago.33

The widening gap between the value of the minimum wage and 

the median wage is another indicator of growing income inequality. 

At its peak in inflation-adjusted terms, the 1968 minimum wage 

($1.60 per hour) was about half of the typical hourly worker’s 

wages at that time (the median hourly wage in 1968 was about $20 

in 2018 dollars and the minimum wage was about $10). Today, at 

$7.25 an hour, the minimum wage is only about one-third of the 

median hourly wage.34 This widening gap shows the extent to 

which low-wage workers are losing ground in today’s economy. As 

Dr. Spriggs testified at the February 7th hearing, citing a David 

Autor and Alan Manning report, a significant portion of wage inVerDate Sep 11 2014 08:01 Jul 13, 2019 Jkt 089006 PO 00000 Frm 00021 Fmt 6659 Sfmt 6602 E:\HR\OC\HR150.XXX HR150

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35Gradually Raising the Minimum Wage to $15: Good for Workers, Good for Businesses, and 

Good for the Economy Before H. Comm. on Educ. and Labor, 116th Cong. (2019) (written testimony of William E. Spriggs, Professor of Economics at Howard University and Chief Economist 

to the AFL-CIO, at 6) [Hereinafter ‘‘Spriggs Testimony’’]; See also David H. Autor et al., The 

Contribution of the Minimum Wage to US Wage Inequality over Three Decades: A Reassessment, 

8 Am. Econ. Journal: Applied Econs. 58 (2016). 36Spriggs Testimony at 6. 37 Based on working 40 hours a week and 52 weeks a year. 38 U.S. Dep’t of Health and Human Servs., 2019 Poverty Guidelines, https://aspe.hhs.gov/2019- 

poverty-guidelines. 39 Board of Governors of the Federal Reserve System, Report on the Economic Well-Being of 

U.S. Households in 2017 21 (2018), https://www.federalreserve.gov/publications/files/2017-reporteconomic-well-being-us-households-201805.pdf. 40 Nat’l Low Income Housing Coal., Out of Reach: The High Cost of Housing 1 (2018), https:// 

reports.nlihc.org/sites/default/files/oor/OOR_2018.pdf; Tracy Jan, A Minimum-Wage Worker Can’t 

Afford a 2-Bedroom Apartment Anywhere in the U.S., Washington Post (Jun. 13, 2018), https:// 

www.washingtonpost.com/news/wonk/wp/2018/06/13/a-minimum-wage-worker-cant-afford-a-2- 

bedroom-apartment-anywhere-in-the-u-s/?utm_term=.4689024537a1. 41Gradually Raising the Minimum Wage to $15: Good for Workers, Good for Businesses, and 

Good for the Economy Before H. Comm. on Educ. and Labor, 116th Cong. (2019) (written testimony of Terrence Wise, Shift Manager, McDonalds) [Hereinafter Wise Testimony]. See also 

House Comm. on Educ. and Labor, Gradually Raising the Minimum Wage to $15: Good for 

Workers, Good for Business, Good for the Economy, YouTube (Feb. 7, 2019), https:// 

www.youtube.com/watch?v=JDGkim7aaHI (statement by Mr. Wise at 3:08:20). 

equality that developed during the 1980s between workers at the 

bottom ten percent of the wage distribution and median wage earners was because the federal minimum wage was unchanged between 1981 and 1990.35

The declining value of the minimum wage and slow wage growth 

for low-wage workers have left millions of workers economically insecure, undermining the minimum wage’s original purpose as a living wage. As Dr. Spriggs testified at the February 7th hearing: 

Since 1980, the once strong relationship between an expanding economy, falling unemployment and lower poverty 

levels became weak. Improvements in the living standards 

of lower income working families no longer comes from 

work, but from transfers, primarily through Medicaid and 

Medicare. The expansion of the 1980s made little progress 

on lowering poverty, as did the expansion from 2001 to 

2008.36

An individual earning the federal minimum wage of $7.25 an 

hour and working full time earns only $15,080 pre-tax annually.37

This income level would put a family of two below the federal poverty level ($16,910 for a two-person family in 2018).38

Persistently low wages have left working people in precarious 

economic situations. An estimated 41 percent of American adults 

cannot afford a $400 emergency 39 and minimum wage workers 

cannot afford a two-bedroom apartment in any part of the country.40 Mr. Wise testified about his experience earning the minimum 

wage at the February 7th hearing: 

[I]t is frightening, because we are truly one missed paycheck away from being homeless. So there is no such thing 

as being sick or having to call in or a family emergency. 

Refrigerator breaking down, car breaks, any of that going 

out is catastrophic, basically, for me and my family. So it 

is just it is all pure luck, you know, hoping everything is 

okay every day.41


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42The federal poverty guidelines are adjusted at the rate of inflation each year using the CPIU. Thus, the poverty line will be the same as today in real terms ($16,910 for a family of two) 

as in 2024. Meanwhile, today’s real value of a $15 minimum wage in 2024 is approximately $13, 

resulting in earnings of about $27,040 per year for full-time work; See also U.S. Dep’t of Health 

and Human Servs., Frequently Asked Questions Related to Poverty Guidelines and Poverty, 

https://aspe.hhs.gov/frequently-asked-questions-related-poverty-guidelines-and-poverty. 43Zipperer Testimony at 3. 44David Cooper, Raising the Minimum Wage to $15 by 2024 Would Lift Pay for Nearly 40 

Million American Workers 7 (2019), https://www.epi.org/files/pdf/160909.pdf. 45 Arindrajit Dube, Minimum Wages and the Distribution of Family Incomes 3 (2018), https:// 

equitablegrowth.org/wp-content/uploads/2018/11/11162018-WP-MINIMUM-WAGES-AND-FAMILY-INCOMES.pdf. 46Kevin Rinz & John Voorhies, The Distributional Effects of Minimum Wages: Evidence from 

Linked Survey and Administrative Data 5 (2018), https://www.census.gov/content/dam/Census/ 

library/working-papers/2018/adrm/carra-wp-2018-02.pdf. 

H.R. 582 WOULD RESTORE THE VALUE OF THE MINIMUM WAGE

THROUGH GRADUAL STEPS IN LINE WITH HISTORICAL INCREASES

Gradually raising the minimum wage to $15 by 2024 pursuant 

to H.R. 582 is a key step toward restoring the value of the minimum wage and correcting past failures to increase it. H.R. 582 

would restore the minimum wage, putting it 28 percent above the 

peak minimum wage in 1968. The Act would finally ensure the 

minimum wage is no longer a poverty level wage.42 As Dr. Zipperer 

explained at the February 7th hearing, ‘‘[a] $15 wage in 2024 

would have 28 percent more purchasing power than the minimum 

wage did at its 1968 high point, but over that time period, the 

economy’s potential for higher living standards, as reflected in 

labor productivity, will have grown by 119 percent.’’ 43 H.R. 582 

would also lift the minimum wage’s share of the full-time, full-year 

median wage to anywhere between 56 to 58 percent and finally 

begin to close the gap between typical workers and minimum wage 

workers.44

H.R. 582 restores the value of the minimum wage through increases well within the ranges of past increases. As Table 1 demonstrates, year-over-year increases in the federal minimum wage 

have ranged from 5 percent in 1975 to 47 percent in 1950. Historically, the average one-year increase to the minimum wage was 14 

percent. As Table 1 shows, 17 of the 22 increases were greater than 

9 percent, which is the smallest one-year percentage increase (in 

year 2024) under H.R. 582. For the seven times in the last 80 years 

where more than five years passed between minimum wage increases, the average one-year increase was 17 percent. The largest 

one-year percentage increase under H.R. 582 would be 18 percent 

in 2019. 

RAISING THE FEDERAL MINIMUM WAGE IMPROVES WORKERS’ ECONOMIC SECURITY WITH LITTLE TO NO NEGATIVE IMPACT ON EMPLOYMENT

Minimum wage increases raise workers’ income, narrow race and 

gender pay gaps, and reduce poverty rates 

Raising the federal minimum wage broadly increases family incomes for low-wage workers. Economists at the University of Massachusetts 45 and the U.S. Census Bureau found that low-income 

families experienced large and economically meaningful earnings 

and income boosts after minimum wage increases.46 They found 


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47 Id. 48 Nat’l Women’s Law Ctr., The Raise the Wage Act: Boosting Women’s Paychecks and Advancing Equal Pay 1 (2019), https://nwlc-ciw49tixgw5lbab.stackpathdns.com/wp-content/uploads/ 

2019/02/Raise-the-Wage-Act-Boosting-Womens-Pay-Checks.pdf. 49 Am. Assoc. of Univ. Women, The Simple Truth About the Gender Pay Gap 5 (2018), https:// 

www.aauw.org/aauw_check/pdf_download/show_pdf.php?file=The_Simple_Truth. 50 Nat’l Women’s Law Ctr., Higher Minimum Wages Promote Equal Pay for Women 1 (2017), 

https://nwlc.org/wp-content/uploads/2017/04/2017-Higher-State-Minimum-Wages-Promote-EqualPay-for-Women.pdf. 51 Elora Derenoncourt & Claire Montialoux, Minimum Wages and Racial Inequality 1 (2018), 

https://scholar.harvard.edu/files/elloraderenoncourt/files/montialoux_jmp_2018.pdf. 52 Id. 53 Arindrajit Dube, Minimum Wages and the Distribution of Family Incomes 23 (2018), https:// 

equitablegrowth.org/wp-content/uploads/2018/11/11162018-WP-MINIMUM-WAGES-AND-FAMILY-INCOMES.pdf; Washington Ctr. for Equitable Growth, Minimum wages and the distribution of family incomes in the United States (April 26, 2017), https://equitablegrowth.org/minimum-wages-and-the-distribution-of-family-incomes-in-the-us/. 54 Id at 28. 55 Ben Zipperer, The Erosion of the Federal Minimum Wage has Increased Poverty, Especially 

for Black and Hispanic Families, Econ. Snapshot (Jun. 13, 2018), https://www.epi.org/publication/the-erosion-of-the-federal-minimum-wage-has-increased-poverty-especially-for-black-and-hispanic-families/. 56David Cooper, Raising the Minimum Wage to $15 by 2024 Would Lift Pay for Nearly 40 

Million American Workers 2 (2019), https://www.epi.org/files/pdf/160909.pdf. 57 Id. at 3. 58 Id. 

that these income-increasing effects grew in magnitude up to five 

years after the policy change.47

Raising the federal minimum wage also impacts gender and racial pay gaps. Six in ten workers earning the current federal minimum wage are women.48 Women on average earn 80 cents for 

every dollar earned by their male counterparts.49 Evidence from 

the states shows that raising the minimum wage can have an impact on the gender pay gap. In states where the minimum wage is 

at or above $8.25 an hour, the gender wage gap is 41 percent 

smaller than states where the minimum wage is lower.50 Similarly, 

analysts estimate that today, there is a 25 percent gap between the 

average annual earnings of African American and White workers.51

Researchers found that the 1966 expansion of federal minimum 

wage protections to industries predominantly filled with workers of 

color, which resulted in a wage increase for many of these workers, 

reduced the black-white earnings gap by 20 percent.52

Higher minimum wages also reduce poverty rates. For every 10 

percent increase in the minimum wage, research finds a 5 percent 

reduction in the nonelderly poverty rate over the long run (three 

or more years).53 These findings suggest that if the United States 

had a $12 national minimum wage in 2017, there would be about 

6.2 million fewer individuals living in poverty today.54 Furthermore, the most comprehensive assessment of the effect of the minimum wage on family incomes finds that every 10 percent increase 

in the inflation-adjusted minimum wage reduces Black and Hispanic poverty rates by approximately 10.9 percent.55

Analysis shows that gradually raising the federal minimum wage 

to $15 by 2024 under H.R. 582 would increase wages for 39.7 million working people (26.6 percent of the workforce) and produce 

$118 billion in additional wages through 2024.56 It would directly 

lift the wages of 28.1 million workers.57 For those 28.1 million 

workers, this translates into a nearly $4,000 increase in annual 

wage income, a 20.9 percent raise.58 Another 11.6 million workers 

would indirectly benefit from a spillover effect as employers inVerDate Sep 11 2014 08:01 Jul 13, 2019 Jkt 089006 PO 00000 Frm 00024 Fmt 6659 Sfmt 6602 E:\HR\OC\HR150.XXX HR150

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59 Id. at 9. 60 Id. at 11. 61 Id. at 9. 62 Id. 63 Id. 64David Cooper, Raising the Minimum Wage to $15 by 2024 Would Lift Pay for Nearly 40 

Million American Workers 9 (2019), https://www.epi.org/files/pdf/160909.pdf. 65 Irene Trung et al., The Growing Movement for $15 1 (2015), http://www.nelp.org/content/ 

uploads/Growing-Movement-for-15-Dollars.pdf. 66 Id. 67David Cooper, Raising the Minimum Wage to $15 by 2024 Would Lift Pay for Nearly 40 

Million American Workers 9–10 (2019), https://www.epi.org/files/pdf/160909.pdf. 68 Id. at 11. 69 Id. at 12. 70David Cooper, Raising the Minimum Wage to $15 by 2024 Would Lift Wages for Nearly 40 

Million American Workers 12 (2019), https://www.epi.org/files/pdf/160909.pdf. 71Zipperer Testimony at 4. 72Doruk Cengiz et al., The Effect of Minimum Wages on Low-Wage Jobs: Evidence from the 

United States Using a Bunching Estimator 1 (2019), https://www.nber.org/papers/w25434.pdf. 

crease wages for workers making slightly more than $15 in order 

to attract and retain workers.59

Millions of full-time workers between the ages of 25 and 54, 

many of whom are the primary breadwinners for their families, 

would see a raise under H.R. 582.60 Ninety percent of the workers 

who would see a raise are over the age of 20 and more than half 

of all affected workers are prime-age workers between the ages of 

25 and 54.61 In fact, among affected workers, the average age is 35 

years old.62 Women, though not quite a majority of the overall 

workforce, represent 57.9 percent of workers affected by a $15 minimum wage in 2024 under H.R. 582.63 H.R. 582 would have a particular impact on workers of color. Nearly 36 percent of working 

women of color would be impacted by a $15 minimum wage in 

2024,64 including African American and Latina women, who are 

overrepresented in low-paying jobs 65 and most likely to be paid the 

lowest wages.66 Thirty-eight percent of all African American workers and 33.4 percent of all Hispanic workers will be impacted.67

Workers with families who will benefit from a $15 minimum 

wage in 2024 are typically the primary breadwinner for their families; they earn an average of 51.9 percent of their family’s total income.68 The effects for single working parents are more dramatic: 

‘‘43.0 percent of all single mothers would receive a raise if the federal minimum wage were increased to $15 by 2024, as would nearly a third (29.4 percent) of single fathers.’’ 69 The parents of 14.4 

million children across the United States, nearly one-fifth (19.6 

percent) of all U.S. children, would see increased wages under H.R. 

582.70

Past minimum wage increases have had little or no negative impact 

on employment 

The most prevalent and consistent criticism of raising the minimum wage is that it will lead to job loss, or negative employment 

effects. However, neither the evidence nor the experiences from recent state and local increases support this claim. As Dr. Zipperer 

testified at the February 7th hearing, ‘‘the weight of recent evidence shows that minimum wages have worked exactly as intended, by raising wages without substantial negative consequences on employment.’’ 71 A 2019 paper, considered to be the 

most important economic study on the minimum wage since the 

1990s, analyzed 138 state-level minimum wage increases: 72 ‘‘[W]e 


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73Zipperer Testimony at 5. 74Sylvia Allegretto & David Cooper, Twenty-Three Years and Still Waiting for Change: Why 

It’s Time to Give Tipped Workers the Regular Minimum Wage 4 (2014), https://www.epi.org/ 

files/2014/EPI-CWED-BP379.pdf. 75 Reich testimony at 11. 76Like H.R. 582, CBO’s $15 scenario would raise wages with five annual increases, and thereafter index the minimum wage to median wage growth. Similarly, CBO’s scenario would also 

phase out exemptions for tipped workers, workers with disabilities, and teens. However, CBO 

assumes the first wage increase will take effect in 2020 rather than 2019. Cong. Budget Office, 

The Effects on Employment and Family Income of Increasing the Federal Minimum Wage (July 

8, 2019), https://www.cbo.gov/publication/55410. 77 Heidi Shierholz, CBO report shows broad benefits from higher minimum wage (July 9, 

2019), https://www.epi.org/press/cbo-report-shows-broad-benefits-from-higher-minimum-wage/. 78Dale Belman & Paul Wolfson, What Does the Minimum Wage Do? 15 (2014), https://research.upjohn.org/cgi/ 

viewcontent.cgi?filename=0&article=1245&context=up_press&type=additional; Shierholz, CBO 

report shows broad benefits from higher minimum wage (2019). 79 Ekaterina Jardim et. al, Minimum Wage Increases, Wages, and Low-Wage Employment: 

Evidence from Seattle, 38 (2018), https://www.nber.org/papers/w23532.pdf. 

studied all major state-level minimum wage increases between 

1979 and 2016 and found they significantly raised wages without 

reducing the employment of low-wage workers. Notably, we also 

found the same positive outcomes for even the highest minimum 

wages in our study.’’ 73 Additionally, researchers have found that 

requiring that tipped workers be paid the full regular minimum 

wage has had no discernable effect on leisure and hospitality employment growth in the seven states where tipped workers receive 

the full, regular minimum wage.74 Further, the evidence from six 

large cities that were early adopters of higher minimum wages 

(Chicago, the District of Columbia, Oakland, San Francisco, San 

Jose, and Seattle) shows that following pay increases for workers 

in food service, employment did not change, and employers did not 

replace these workers with more-educated workers.75

In July 2019, the Congressional Budget Office (CBO) released a 

report analyzing the employment and family income of a minimum 

wage proposal similar the H.R. 582.76 CBO also analyzed the im- pacts of federal minimum wage increases to $12 by 2025 and $10 

by 2025. CBO estimated that gradually raising the minimum wage 

to $15 would increase earnings for up to 27.3 million workers in 

2025, boost annual family income by hundreds of dollars per year 

on average for families with income below three times the federal 

poverty line, reduce income inequality, and lift 1.3 million Americans—including 600,000 children—out of poverty. Simultaneously, 

CBO predicted the policy would decrease number of workers employed in any given week by 1.3 million in 2025. However, CBO’s 

approach should not be applied to H.R. 582. To arrive at its employment estimate, CBO states that it synthesized results from 

multiple research studies, some of which used high-quality, credible methods, but many of which were methodologically flawed.77

CBO also overlooked the fact that the vast majority of rigorous research from labor economists, particularly more recent studies that 

take advantage of significant state-level variation in minimum 

wages, finds minimal or no negative effects on employment when 

raising the minimum wage and multiple recent studies even find 

positive effects.78

While a 2017 University of Washington analysis of the first stage of Seattle’s minimum wage increase to $15 concluded that the increase resulted in large employment losses,79 the study drew wide 

criticism for its methodology, including but not limited to: its reliance on a single case study; its inability to properly statistically 


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80Gradually Raising the Minimum Wage to $15: Good for Workers, Good for Businesses, and 

Good for the Economy Before H. Comm. on Educ. and Labor, 116th Cong. (2019) (written testimony of Michael Reich, Professor, University of California) [Hereinafter Reich Testimony]. See 

also Josh Hoxie, The Seattle Minimum Wage Study is Utter B.S., Fortune (Jun. 27, 2017), http:// 

fortune.com/2017/06/27/seattle-minimum-wage-study-results-impact-15-dollar-uw/; Ben Zipperer 

& John Schmitt, The ‘High Road’ Seattle Labor Market and the Effects of the Minimum Wage 

Increase 8 (2017), https://www.epi.org/files/pdf/130743.pdf. 81 Ben Zipperer & John Schmitt, The ‘High Road’ Seattle Labor Market and the Effects of the 

Minimum Wage Increase 4 (2017), https://www.epi.org/files/pdf/130743.pdf. 82 Noam Scheiber, They Said Seattle’s Higher Base Pay Would Hurt Workers. Why Did They 

Flip?, New York Times (Oct. 22, 2018), https://www.nytimes.com/2018/10/22/business/economy/ 

seattle-minimum-wage-study.html. 83Zipperer Testimony at 5. 84David Cooper et al., Bold Increases in the Minimum Wage Should be Evaluated for the Benefits of Raising Low-wage Workers’ Total Earnings 2 (2018), https://www.epi.org/files/pdf/ 

143838.pdf. 85 Id. 

control for Seattle’s booming economy during the time of the study; 

and failure to account for businesses with multiple locations, which 

excluded an estimated 40 percent of the impacted workforce.80 Notably, the study’s results imply that Seattle’s minimum wage increase was the cause of a large increase in the number of jobs paying more than $19 per hour an implausible result, given that the 

minimum wage had increased to only $13 during the authors’ period of study.81 In 2018, the study’s authors issued a revised 

version that walked back the study’s strong conclusions, although 

many labor economists have remaining methodological criticisms.82

Moreover, estimates that singularly focus on job loss or other 

negative employment effects ignore the evidence that working people overwhelmingly benefit when there is an increase in the minimum wage. Dr. Zipperer’s testimony at the February 7th hearing 

noted that: ‘‘The benefits of a $15 minimum wage in 2024 for workers, their families, and their communities will far outweigh any potential costs of the policy.’’ 83 Indeed, CBO’s 2014 analysis found 

that raising the minimum wage lifted nearly 1 million workers out 

of poverty and even the revised 2018 Seattle case study found that 

minimum wage workers on average netted a pre-tax increase of 

$10 an hour per week. 

Furthermore, focusing on a static estimate such as job losses ignores the high degree of worker ‘‘churn’’ in the low-wage labor market, giving the misleading impression that the result of higher minimum wages is that a given pool of workers would lose their jobs, 

find no replacement, and have no earnings over an entire year.84

By contrast, research on the nature of low-wage work shows that 

higher minimum wages may reduce hours worked and marginally 

increase time between jobs, but generally do not lead to loss of entire jobs. Moreover, the impact of lost hours and increased time between jobs are spread across a large number of affected workers, 

each of whom work a little less but earn more during the year overall.85 In other words, a study finding any ‘‘total reduction in employment’’ (job loss) is in reality likely uncovering that workers 

may work several fewer hours during a week, but they still take 

home more pay due to an increase in the minimum wage. 

MINIMUM WAGE INCREASES ARE LINKED WITH IMPROVED SOCIAL

OUTCOMES

Raising the minimum wage is also associated with positive social 

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86Gradually Raising the Minimum Wage to $15: Good for Workers, Good for Businesses, and 

Good for the Economy Before H. Comm. on Educ. and Labor, 116th Cong. (2019) (written testimony of Paul A. Brodeur, State Representative 32nd Middlesex District Commonwealth of Massachusetts House of Representatives, at 3) [Hereinafter Brodeur Testimony]. 87 J. Paul Leigh & Juan Du, Effects of Minimum Wages on Population Health 5 (2018), https:// 

www.healthaffairs.org/do/10.1377/hpb20180622.107025/full/HPB_2018_RWJF_06_W.pdf. 88 Id. 89 Id. 90Steven H. Woolf et al., How Are Income and Wealth Linked to Health and Longevity? 5 

(2015), https://www.urban.org/sites/default/files/publication/49116/2000178-How-are-Income-andWealth-Linked-to-Health-and-Longevity.pdf. 91Tsu-Yu Tsao et al., Estimating Potential Reductions in Premature Mortality in New York 

City From Raising the Minimum Wage to $15, 106 Am. Journal of Pub. Health 1036 (2016). 

92 Julie Vogtman, Nearly one in Five Working Mothers of Very Young Children Work in LowWage Jobs, Nat’l Women’s Law Ctr. (Apr. 5, 2017), https://nwlc.org/blog/nearly-one-in-five-working-mothers-of-very-young-children-work-in-low-wage-jobs/. 93Kerri M. Raissian & Lindsey Rose Bullinger, Money Matters: Does the Minimum Wage Affect 

Child Maltreatment Rates, 72 Child and Youth Serv. Rev. 60, 65 (2017). 94 Nat’l Sci. Council on the Developing Child, The Timing and Quality of Early Experiences 

Combine to Shape Brain Architecture 8 (2007), https://46y5eh11fhgw3ve3ytpwxt9rwpengine.netdna-ssl.com/wp-content/uploads/2007/05/TimingllQualityllEarlyllExperiences-1.pdf. 

fants, and children. As Massachusetts State Representative Paul 

Brodeur testified at the February 7th hearing: 

The secondary, and in some cases tertiary benefits of 

raising the minimum wage are clear. Issues such as food 

insecurity, improved childhood health statistics, reduced 

employment turnover, and other factors have emerged as 

having been largely effected by these [minimum wage] increases. For example, a 2016 report by the Century Foundation estimated that the increase to a $15 minimum wage 

would decrease food insecurity in the Commonwealth [of 

Massachusetts] by 7% as 18,000 households would no 

longer be food insecure. We expect these trends to continue.86

In adults, studies strongly correlate increases in minimum wages 

with increases in overall health and fewer illness-induced absences 

from work.87 Researchers found that increases in state minimum 

wages have been linked to decreased smoking,88 particularly 

among women in low wage work.89 Additionally, with higher 

wages, workers have access to health options that increase quality 

of life and longevity, including the ability to afford healthier food.90

Researchers have also linked a $15 minimum wage to a 4 to 8 percent reduction in premature deaths among low-income populations 

in New York City.91

Raising the minimum wage will have a positive impact on children and families. Nearly one in five working mothers with children under the age of three work in low-wage jobs.92 Raising the 

minimum wage boosts families’ disposable incomes and directly affects a caregiver’s ability to provide a child with basic needs such 

as appropriate clothing, more food and nutrients, medical care, and 

better home conditions. This is particularly important for children 

growing up in single, female-headed households who are more likely to lack basic needs 93 and indirectly experience toxic stress due 

to deep poverty.94 As Mr. Wise testified at the February 7th hearing: I often imagine what $15 an hour would mean for me 

and my family. I wouldn’t have to worry about providing 

the basic necessities for my family. We could keep food on 


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95Wise Testimony at 3. 96 Christopher Maynard, How Raising the Minimum Wage by $1 Could Reduce Cases of Child 

Neglect, Consumer Affairs (August 18, 2017), https://www.consumeraffairs.com/news/how-raising-the-minimum-wage-by-1-could-reduce-cases-of-child-neglect-081817.html. 97Kelli Komro, The Effect of an Increased Minimum Wage on Infant Mortality and Birth 

Weight, 106 Am. Journal of Pub. Health 1514, 1516 (2016). 98 Ali Jalali, The Minimum Wage and Infant Mortality 14 (2018), https:// 

static1.squarespace.com/static/5b79a2af9f8770250f45ab0c/t/5bd7bb3e24a694466008aae9/ 

1540864832308/JMP.pdf. 99George Wehby et al., Effects of the Minimum Wage on Infant Health 4 (2018), https:// 

www.nber.org/papers/w22373.pdf. 100Kelli Komro, The Effect of an Increased Minimum Wage on Infant Mortality and Birth 

Weight, 106 Am. Journal of Pub. Health 1514, 1516 (2016). 101George Wehby et al., Effects of the Minimum Wage on Infant Health 3 (2016), https:// 

www.nber.org/papers/w22373.pdf. 102 Amanda Y. Agan & Michael D. Makowsky, The Minimum Wage, EITC, and Criminal Recidivism 15 (2018), https://www.nber.org/papers/w25116.pdf. 

the table. No one would have to worry about doing homework in the dark. I could get them the school supplies 

whenever they need them.95

Moreover, minimum wage increases are proven to reduce the risk 

of child maltreatment, particularly neglect. These effects are pronounced for young children under 5 years of age and school-aged 

children. Recently published research provides strong evidence that 

increasing the minimum wage by $1.00 would lead to an annual reduction of 9,700 child neglect reports to Child Protection Services.96

Increases in the federal minimum wage are also linked to improved health and economic outcomes for low-wage mothers and 

their babies. Researchers have found that infant mortality, low 

birth weight, and risk of poor health are greater for those babies 

born into families where the primary breadwinner earns the federal minimum wage or less.97 Researchers have found that a 10 

percent increase in the minimum wage reduces infant mortality 

rates by 3.2 percent 98 and that a $1.00 increase in the minimum 

wage increases birth weight significantly.99 A 2016 study found 

that ‘‘[i]f all states in 2014 had increased their minimum wages by 

one dollar there would have likely been an estimated 2,790 fewer 

low birth weight births and 518 fewer post neonatal deaths for the 

year.’’ 100 Increases in income during pregnancy are also correlated 

with a number of positive effects for both maternal and babies’ 

health including improved nutrition, lower financial stress, and 

greater prenatal care.101

Research also demonstrates that increases in the minimum wage 

reduce recidivism by drawing individuals into the legal labor market rather than income-generating criminal activity (e.g., property 

crimes or selling illegal drugs). A 2018 study found that a minimum wage increase of $0.50 translates into a 2.8 percent decrease 

in the probability of men and women returning to prison within 

one year.102 This decrease in recidivism can translate into savings 

in corrections costs for state and federal governments. 

RAISING THE FEDERAL MINIMUM WAGE BENEFITS LOCAL BUSINESSES

Congress has long recognized the impact of the minimum wage 

on commerce, declaring in the FLSA’s preamble that ‘‘[l]abor conditions detrimental to the maintenance of the minimum standard of 

living necessary for health, efficiency, and general wellbeing of 

workers’’ are harmful to the economy by burdening ‘‘the free flow 


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103 29 U.S.C. § 202(a). 104Sylvia Allegretto & Michael Reich, Are Local Minimum Wages Absorbed by Price Increases?Estimates from Internet-based Restaurant Menus 25 (2016),http:// 

www.irle.berkeley.edu/files/2015/Are-Local-Minimum-Wages-Absorbed-by-Price-Increases.pdf. 105Daniel Cooper et al., The Local Aggregate Effects of Minimum Wage Increases 12 (2017), 

https://www.minneapolisfed.org/institute/working-papers/wp17-25.pdf. 106Michael Reich et al., The Employment Effects of a $15 Minimum Wage in the U.S. and 

in Mississippi: A Simulation Approach 5 (2019), http://irle.berkeley.edu/files/2019/02/The-Employment-Effects-of-a-15-Minimum-Wage-in-the-US-and-in-Mississippi.pdf. 107Daniel Aaronson & Eric French, How Does a Federal Minimum Wage Hike Affect Aggregate Household Spending 3 (2013), https://www. chicagofed. org/publications/chicago-fed-letter/ 

2013/august-313. 108 Cristian Alonso, Beyond Labor Market Outcomes: The Impact of the Minimum Wage on 

Nondurable Consumption 1–2 (2016), http://dx. doi. org/10. 2139/ssrn. 2818623. 109Daniel Cooper et al., The Local Aggregate Effects of Minimum Wage Increases 3 (2017), 

https://www.minneapolisfed.org/institute/working-papers/wp17-25.pdf. 

of goods.’’ 103 Yet, efforts to raise the federal minimum wage are 

often met with concerns regarding impacts to businesses, including 

small and local businesses. As discussed below, research indicates 

businesses can absorb gradual minimum wage increases, without 

loss of profits or negative employment effects, through small price 

adjustments, partially offset by increased sales and decreased employee turnover costs. 

Businesses adjust to minimum wage increases through slight price 

increases without loss of profits 

Research shows that businesses absorb minimum wage increases 

primarily through relatively small price increases passed on to consumers as well as through reduced turnover and enhanced productivity among their workers. A 2018 U.C. Berkeley study of 884 restaurants in San Jose, California, following a 25 percent minimum 

wage increase from $8 to $10 an hour did not find reduced employment. Instead, it found that restaurants absorbed higher labor 

costs by slightly increasing menu prices—1.45 percent on average— 

and through cost savings from lower employee turnover.104 Similarly, a 2017 Federal Reserve Bank of Boston analysis of 27 metropolitan statistical areas found that a 10 percent increase in the 

minimum wage increased prices on the whole by only 0.3 percent.105 Further, recent analysis on the impact of a $15 minimum 

wage by 2024 estimates that ‘‘businesses could absorb the remaining payroll cost increases by increasing prices by 0.6 percent 

through 2024. This price increase is well below the annual inflation 

rate of 1.7 percent over the past five years.’’ 106

Businesses and local economies benefit from increased spending by 

low-wage workers 

Minimum wage increases stimulate consumer spending and consumption, which helps offset price increases. A 2013 report estimated that a $1.75 increase in the hourly federal minimum wage 

could increase aggregate household spending by $48 billion, or 0.3 

percent of the Gross Domestic Product, in the year following the 

minimum wage hike.107 Similarly, a 2016 report projected that a 

10 percent increase in the minimum wage would increase national 

sales by $2 billion, or 1.1 percent, per year.108 A 2017 Federal Reserve Bank of Boston paper found that increases in minimum 

wages lead to nominal increases in food consumption both at and 

away from home.109 Specifically, the authors noted that a 10 percent minimum wage increase led to an increase in real spending 


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110 Id. 111 Id. 112Gradually Raising the Minimum Wage to $15: Good for Workers, Good for Businesses, and 

Good for the Economy Before H. Comm. on Educ. and Labor, 116th Cong. (2019) (written testimony of Kathy Eckhouse Owner of La Quercia at 3) [Hereinafter Eckhouse Testimony]. 113Daniel Aaronson et al., The Spending and Debt Response to Minimum Wage Hikes, 7 Am. 

Econ. Review 3111, 3125 (2012). 114Wise Testimony at 3. 115 Eckhouse Testimony at 3. 116 Arindrajit Dube et al., Minimum Wage Shocks, Employment Flows and Labor Market Frictions, 34 Journal of Labor Econs. 663-704, 664 (2016). 

on food away from home by about 0.5 percentage points.110 This 

same paper also found increased purchases in durable good purchases, such as cars, in advance of a change in the minimum 

wage.111

Ms. Eckhouse, an Iowan small business owner, testified at the 

February 7th hearing on how increased spending and consumption 

from a minimum wage increase is important for sales: 

Workers in one business are the consumers for another. 

Minimum wage increases put money in the hands of people who most need to spend it—for car repairs and new 

shoes for a child, or by not having to choose between groceries and a medical bill. Increased minimum wages mean 

increased consumer spending across all businesses, helping 

other businesses grow.112

This powerful impact to economic growth from a small wage increase is due to the well-documented tendency of low-wage workers 

to spend their additional earnings. In 2012, economists found that 

immediately following a minimum wage hike, household income 

rose on average by about $250 per quarter; however, for households 

with minimum wage workers spending increased by roughly $700 

per quarter.113 Mr. Wise testified at the February 7th hearing 

about how an increase to the minimum wage would mean he would 

more money in his community: 

With a $15 living wage, I could afford to take them out 

to do something fun. Honestly, the last time I went on a 

date with my fianc ́e was to see the movie ‘Matrix’. That 

was in 1999. Valentine’s Day is next week and I want to 

buy each of the women in my life some flowers . . . [B]ut 

what would $15 really mean? It would mean my daughters 

could meet their grandmother for the very first time, because we could afford to travel to South Carolina to visit 

her.114

Ms. Eckhouse made this point at the February 7th hearing: ‘‘[i]t’s 

not raising the minimum wage that is a threat to business. It’s 

stagnant wages, such as we’ve seen in recent decades, which weaken the consumer demand that businesses depend on to survive and 

grow.’’ 115

Businesses benefit from cost savings from decreased employee turnover 

As a result of the increase in the minimum wage, businesses also 

realize cost savings from lower employee turnover, which also offset 

price increases.116 A 2012 case study found that turnover of an individual employee costs businesses about one-fifth of the employVerDate Sep 11 2014 08:06 Jul 13, 2019 Jkt 089006 PO 00000 Frm 00031 Fmt 6659 Sfmt 6602 E:\HR\OC\HR150.XXX HR150

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117 Heather Boushey & Sarah Jane Glynn, There Are Significant Business Costs to Replacing 

Employees, Ctr. for Am. Progress (November 16, 2012, 3:44 AM), https:// 

www.americanprogress.org/issues/economy/reports/2012/11/16/44464/there-are-significant-business-costs-to-replacing-employees/. 118Supra note 116 at 700. 119 Id. 120 Eckhouse Testimony at 2. 121 Businesses for a Fair Minimum Wage, Federal Sign On Statement, https:// 

www.businessforafairminimumwage.org/Federal-15-By-2024-Sign-On-Statement (last visited 

Jun. 18, 2019). 122 Rachel West & Michael Reich, The Effects of Minimum Wages on SNAP Enrollments and 

Expenditures 5 (2014), https://cdn.americanprogress.org/wp-content/uploads/2014/03/ 

MinimumWage-report.pdf. 

ee’s salary.117 A 2014 report found turnover rates for teenaged and 

restaurant workers fell substantially following a minimum wage increase, with most of the reductions coming within the first three 

quarters after the increase and without significant changes in employment levels.118 Specifically, the economists found that ‘‘[f]or a 

10 percent minimum wage increase, turnover rates decline by 

around 2.0 percent for teenagers and 2.1 percent for the restaurant 

workforce.’’ 119

Ms. Eckhouse’s testimony at the February 7th hearing explained 

how businesses benefit from decreased employee turnover as a result of minimum wage increases: 

Employees new to our operation—or any operation— 

aren’t as productive as long-term staff. They require skills 

and training specific to us. It takes at least three months 

for an employee to understand our particular processes 

and be efficient, even those who have worked in meat processing plants before. That’s just the beginning. It takes a 

year for true proficiency; all jobs in all occupations require 

familiarity and skill. We see more waste, more down time, 

and more inefficiency on our production line with newer 

staff. That’s costly to us. And because turnover is costly for 

all employers, reduced turnover is an important benefit of 

raising the minimum wage. 

In addition, not spending time on a constant cycle of rehiring and training frees us to look beyond the day-to-day 

to innovate and grow our business. It encourages employees to be a part of that process, too, as they develop new 

skills and techniques in our field, and familiarity with 

what customers want.120

A statement signed by over 800 businesses in support of raising 

the federal minimum wage to $15 by 2024 states, ‘‘[r]aising the 

minimum wage pays off in lower employee turnover, reduced hiring 

and training costs, lower error rates, increased productivity and 

better customer service. Employees often make the difference between repeat customers or lost customers.’’ 121

Minimum wage increases lead to government savings on public benefits 

Ensuring that workers have enough money to cover their basic 

needs can result in a reduction in public expenditures. For example, a 2014 report looking at the impacts of raising the minimum 

wage to $10.10 an hour on the Supplemental Nutrition Assistance 

Program (SNAP) found programmatic cost savings.122 The report 

estimated that raising the federal minimum wage to $10.10 per 


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123 Id. 124 Rachel West, The Murray-Scott Minimum-Wage Bill: A Win-Win for Working Families and 

Taxpayers, Ctr. for Am. Progress (Apr. 30, 2015, 9:01 AM), https://www.americanprogress.org/ 

issues/poverty/news/2015/04/30/111808/the-murray-scott-minimum-wage-bill-a-win-win-for-working-families-and-taxpayers/. 125 Brodeur Testimony at 3. 126 Eckhouse Testimony at 2. 127David Cooper, Valentine’s Day is Better on the West Coast (at Least For Restaurant Servers), Working Econs. Blog (February 7, 2017, 1:46 PM), https://www.epi.org/blog/valentines-dayis-better-on-the-west-coast-at-least-for-restaurant-servers/. 128Michael Lynn et al., Consumer Racial Discrimination in Tipping: A Replication and Extension 13 (2008), https://www.wagehourlitigation.com/wp-content/uploads/sites/215/2015/10/cornell.pdf. 

hour would lead to an annual decrease in program expenditures by 

nearly $4.6 billion (or about 6 percent of the SNAP program), leading to program savings of $46 billion over 10 years,123 and an increase to $12 per hour would save $53 billion over 10 years.124

Mr. Brodeur testified at the February 7th hearing regarding the 

impacts of raising wages on benefit programs in Massachusetts: 

[We] saw that the increased purchasing power, increased 

taxable income, reduced caseloads in social benefits programs, and growth in business confidence and success 

were outcomes of our incremental increases in the minimum wage.125

Ms. Eckhouse testified at the February 7th hearing regarding the 

costs to public benefit programs: 

When businesses pay wages that are not enough to live 

on, the costs of necessities like food and housing get partly 

shifted to the community at large, to taxpayer-funded government assistance programs and food banks, for example. 

It also means that our business is subsidizing the profits 

of low-pay competitors. This is not a fair or efficient way 

to run an economy.126

SUBMINIMUM WAGES UNDER THE FLSA CREATE INEQUITY FOR TIPPED

WORKERS, INDIVIDUALS WITH DISABILITIES, AND TEENAGERS

The tipped minimum wage leaves workers vulnerable 

Tipped workers are generally low-wage workers, earning about 

$6.50 per hour less (in 2016 dollars) than the median, hourly nontipped worker and experiencing poverty at more than twice the 

rate of non-tipped workers.127 Tipped workers’ earnings are often 

irregular and unpredictable, making it difficult to budget and plan. 

Compounding these challenges, research shows that tipping is 

often discriminatory, with both White and Black consumers discriminating against Black workers and leaving smaller tips than 

those left for White tipped workers.128

Ms. Gupta testified at the February 7th hearing about how the 

origins of tipping are intertwined with the country’s ongoing struggles with racial and gender inequality. Ms. Gupta noted that: 

[B]efore the Civil War, tipping was largely frowned upon 

in the United States. But after its end, the practice of tipping proliferated. At that time, the restaurant and hospitality industry, exemplified by the Pullman Company, 

hired newly freed slaves without paying them base wages. 

The effect was to create a permanent servant class, for 


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129Gradually Raising the Minimum Wage to $15: Good for Workers, Good for Businesses, and 

Good for the Economy Before H. Comm. on Educ. and Labor, 116th Cong. (2019) (written testimony of Vanita Gupta President and CEO of the Leadership Conference on Civil and Human 

Rights at 4) [Hereinafter Gupta Testimony]. 130Fair Labor Standards Act of 1938, Pub. L. No. 75–718, 52 Stat. 1060. 131 315 U.S. 386 (1942). 132 R. R. Wright, Jr., The Negro in Unskilled Labor, 49 The Annals of the Am. Acad. of Political and Soc. Scis. 19, 19–27 (1913). 133Gupta Testimony at 4. 134Fair Labor Standards Amendments of 1966, Pub. Law No. 89–601, 80 Stat. 830 (current 

version at 29 U.S.C. § 201, et seq.). 135To be considered a tipped employee, an employee must be ‘‘engaged in an occupation in which he customarily and regularly receives more than $30 a month in tips.’’ 29 U.S.C. § 203(t). 136Prior to 1996, the employer cash wage and tip credit were set as a percentage of the minimum wage. The percentage ranged from 40 to 55 percent of the minimum wage. 137 In 1979, the tipped minimum wage was set to 55 percent of the minimum wage (Fair Labor 

Standards Amendments of 1977, Pub. L. No. 95–151). In 1980, the tipped minimum wage was 

set to 60 percent of the minimum wage (the Fair Labor Standards Amendments of 1977, Pub. 

L. No. 95–151). In 1990, the tipped minimum wage was set to 55 percent of the minimum wage 

(Fair Labor Standards Amendments of 1989, Pub. L. No. 101–157). In 1991, the tipped minimum wage was set to 50 percent of the minimum wage (Fair Labor Standards Amendments 

of 1989, Pub. L. No. 101–157). 138Small Business Job Protection Act of 1996, Pub. L. No. 104–188, 110 Stat. 1755. 139From inception to 1996, the tipped wage was set as a percentage of the full minimum 

wage. In 1996, the tipped wage was decoupled from the minimum wage and set as a fixed 

amount. 140There is no definitive count of the number of tipped employees. The Current Population 

Survey (CPS), which is typically used to study minimum wage and related labor issues, does 

whom the responsibility of paying a wage was shifted from 

employers to customers.129

As first passed in 1938, the FLSA did not reference tips or tipped 

workers. ‘‘Retail and service establishments,’’ which have a high 

number of tipped workers, were not covered under the statute.130

In 1942, the U.S. Supreme Court affirmed the tipping model exemplified by Pullman workers, holding in Williams v. Jacksonville 

Terminal Co. that an employer may count an employee’s tips as a 

credit against the employer’s full obligation to pay the minimum 

wage.131 This policy continued to have a disproportionate impact on 

workers of color. By 1900, about 25 percent of all Black non-agricultural workers had jobs as servants or waiters, including the 

overwhelming majority of Black women.132 ‘‘Having to depend on 

tipping kept African Americans in an economically and socially 

subordinate position.’’ 133

In 1966, Congress amended the FLSA to expand its coverage to 

hotels and restaurants, and it included ‘‘tip credit’’ provisions for 

the first time.134 Under section 3(m) of the FLSA, an employer may 

pay a ‘‘tipped employee’’ 135 a cash wage that is less than the full 

federal minimum wage, as long as the combination of tips and the 

cash wage from the employer equals the federal minimum wage. A 

‘‘tip credit’’ is the amount from employee tips that an employer may 

count against its liability for the required payment of the full federal minimum wage.136 The first tip credit was established as part 

of the 1966 FLSA amendments, which set the cash wage, also 

known as the tipped minimum wage, to 50 percent of the minimum 

wage. Over the next three decades, this percent ranged from 50 to 

60 percent of the minimum wage.137 In 1996, however, Congress 

decoupled the tipped minimum wage from the minimum wage, 

locking the cash wage at $2.13 per hour.138 There has not been an 

increase in the tipped minimum wage in 28 years.139

Of the approximately five million tipped workers, an estimated 

four million tipped employees work in areas where employers are 

permitted to take a tip credit.140 An estimated one million tipped 


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not contain an identifier for tipped workers. Rather, the CPS includes a variable identifying individuals as receiving ‘‘overtime pay, tips, or commissions.’’ While this is not specific enough to 

determine the tipped status of any given respondent in the CPS, most researchers in this area 

have tended to use the CPS as a starting point by identifying individuals in the CPS reporting 

high shares of tips, overtime, or commissions. Based on calculations from the Congressional Research Service, an estimated 5.1 million workers are in occupations typically considered ‘‘predominantly tipped’’ occupations. An estimated 1.05 million tipped employees work in the seven 

states that have prohibited use of a tip credit. Estimates are based on BLS Occupational Employment Statistics (OES) data for 2017. 141Twelve states require a cash wage of $2.13 an hour by state law or by reference to federal 

law: Georgia, Indiana, Kansas, Kentucky, Nebraska, New Jersey, New Mexico, North Carolina, 

Texas, Utah, Virginia, and Wyoming. Five states have no state minimum wage: Alabama, Louisiana, Mississippi, South Carolina, and Tennessee. Wage and Hour Division, Minimum Wages 

for Tipped Employees (January 1, 2019), https://www.dol.gov/whd/state/tipped.htm. 142 Id. 143 Elise Gould & David Cooper, Seven Facts about Tipped Workers and the Tipped Minimum 

Wage, Working Econs. Blog (May 31, 2018, 4:40 PM), https://www.epi.org/blog/seven-facts-abouttipped-workers-and-the-tipped-minimum-wage/. 144 Roberto A. Ferdman, Which US States Tip the Most (and Least), as Shown by Millions of 

Square Transactions, Quartz (March 21, 2014), https://qz.com/189458/the-united-states-of-tipping/. 145 Elise Gould & David Cooper, supra note 143. 146 Nat’l Women’s Law Ctr., The Raise the Wage Act: Boosting Women’s Paychecks and Advancing Equal Pay 2 (2017), https://nwlc-ciw49tixgw5lbab.stackpathdns.com/wp-content/uploads/ 

2019/02/Raise-the-Wage-Act-Boosting-Womens-Pay-Checks.pdf. 147Michael Lynn & Christopher Boone, Have Minimum Wage Increases Hurt the Restaurant 

Industry? The Evidence Says No! 3–13 (2015), https://scholarship.sha.cornell.edu/cgi/ 

viewcontent.cgi?article=1000&context=chrreports. 148 Elise Gould & David Cooper, supra note 143. 

employees work in the seven states (Alaska, California, Minnesota, 

Montana, Nevada, Oregon, and Washington) often referred to as 

‘‘equal treatment states’’ that prohibit employers from using a tip 

credit and require tipped employees be paid the full statutory state 

or federal minimum wage, whichever is greater. Seventeen states 

require a cash wage that is equal to the federal rate of $2.13 per 

hour.141 Twenty-six states and the District of Columbia set a 

tipped minimum wage that is greater than the federal rate of $2.13 

per hour.142

Research demonstrates that tipped workers fare better in the 

seven states that prohibit employers from taking a tip credit. 

Tipped workers in these states that have eliminated the tipped 

subminimum wage earn about 15 percent more per hour than 

workers receiving $2.13 as a cash wage.143 Data also show that 

customers in equal treatment states continue to tip. In fact, a higher percentage of customers tip in Washington State (an equal treatment state) than in New York State (a state that allows employers 

to take a tip credit), and customers in Alaska (an equal treatment 

state) leave the highest average tip among all 50 states.144 Poverty 

rates for tipped workers, especially waitstaff and bartenders, in 

equal treatment states are lower than states with a $2.13 tipped 

minimum wage.145 Tipped occupations in equal treatment states 

also have a 23 percent smaller gender wage gap compared to states 

with a $2.13 tipped minimum cash wage.146

Research also shows that increases in the tipped minimum wage 

do not have negative effects on employment in full-service restaurants or on the number of full-service restaurants.147 In fact, 

analysis of employment and establishment data from equal treatment states shows that between 2011 and 2014, the number of fullservice restaurants grew by 6.0 percent in equal treatment states 

compared to 4.1 percent growth in states with separate, lower 

tipped minimum wages.148 In the same period, employment in fullservice restaurants grew 13.2 percent in equal treatment states 


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149 Id. 150Sylvia Allegretto & David Cooper, Twenty-three Years and Still Waiting for Change 18 

(2014), https://www.epi.org/files/2014/EPI-CWED-BP379.pdf. 151The Nat’l Econ. Council et al., The Impact of Raising the Minimum Wage on Women, and 

the Importance of Ensuring a Robust Tipped Minimum Wage 2 (2014), https:// 

obamawhitehouse.archives.gov/sites/default/files/docs/ 

20140325minimumwageandwomenreportfinal.pdf. 152Sylvia A. Allegretto, Should New York State Eliminate its Subminimum Wage? 11 (2018), 

http://irle.berkeley.edu/files/2018/04/Should-New-York-State-Eliminate-its-SubminimumWage.pdf. 153Gov’t Accountability Office, Special Minimum Wage Program: Centers Offer Employment 

and Support Services to Workers with Disabilities, but Labor Should Improve Oversight 4 

(2001), https://www.gao.gov/new.items/d01886.pdf. 

compared to 9.1 percent in non-equal treatment states.149 Additionally, from January 1995 to May 2014, employment in the leisure 

and hospitality sector, which employs a high percentage of tipped 

workers, grew 43.2 percent in the seven equal treatment states, 

compared with 39.2 percent growth in non-equal treatment 

states.150

Proponents of keeping the tip credit argue that because employers are obligated to ensure tipped employees are always making 

the full federal minimum wage, there is no need to change the system. However, the complexity of the two-tier wage system can be 

confusing and burdensome for employers, making compliance and 

enforcement difficult. Too often, employers, through error or outright wage theft, fail to make up the difference and ensure their 

workers are making the full minimum wage. According to a 2014 

report, more than 1 in 10 of surveyed workers in predominantly 

tipped occupations report they received hourly wages, including 

tips, below the full federal minimum wage.151 A compliance sweep 

of nearly 9,000 full-service restaurants by the U.S. Department of 

Labor’s (DOL) Wage and Hour Division (WHD) from 2010 to 2012 

found 83.8 percent of investigated restaurants had some type of 

violation; WHD found 1,170 tip credit violations that resulted in 

nearly $5.5 million in back wages.152

In November 2018, the Trump Administration rescinded guidance that prohibited employers from using a tip credit for employees who spend more than 20 percent of their time performing duties incidental to the tipped employee’s regular duties and that are 

not by themselves directed toward producing tips. This rescinded 

guidance was designed to ensure that employers could not evade 

minimum wage requirements by having tipped workers perform 

work that a non-tipped worker would normally perform. The rollback of this guidance will allow employers to more often make use 

of a tip credit, making workers more vulnerable to wage theft. 

The subminimum wage for individuals with disabilities is a vestige 

of the discriminatory past 

Section 14(c) of the FLSA allows employers and organizations to 

apply to DOL for special certificates to pay individuals with disabilities at wages less than the minimum wage and less than the prevailing wage. There is no minimum wage requirement for employers hiring an individual with a disability under 14(c) certificates. 

More than half of these employees earn $2.50 an hour or less.153

Eliminating subminimum wage certificates for individuals with disabilities will create opportunities for individuals with disabilities to 

be competitively employed, taxpaying citizens and participate more 

fully in their communities. Furthermore, the use of these certifiVerDate Sep 11 2014 08:01 Jul 13, 2019 Jkt 089006 PO 00000 Frm 00036 Fmt 6659 Sfmt 6602 E:\HR\OC\HR150.XXX HR150

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154 Id. 155Dep’t of Labor, 14(c) Certificate Holders, https://www.dol.gov/whd/workerswithdisabilities/ 

certificates.htm. 156Olmstead v. L.C. by Zimring, 527 U.S. 581, 582 (1999). 

cates is on the decline. A GAO review of 14(c) certificate holders 

in 2001 found over 5,600 employers nationwide utilized 14(c) certificates for 424,000 workers.154 In July 2018, there were less than 

200,000 workers with disabilities paid subminimum wages.155

In 1938, when Section 14(c) of the FLSA was enacted, individuals 

with disabilities were predominantly housed in institutions and 

viewed as unable to learn or function independently. There were no 

statutory requirements to support individuals with disabilities in 

the workplace, and individuals with disabilities did not have legal 

protections from discrimination. Today, individuals with disabilities 

are trained to enter the workforce alongside their peers. Federal 

policy now makes a presumption of ability, reflecting advances in 

research and a better understanding of disability. This presumption of ability, paired with improvements in technology and support 

for access to such technology, empowers individuals with disabilities to be as productive as their peers. Section 14(c) is the only remaining vestige of the outdated model and the presumption of inability in federal policy. 

Since 1990, the Americans with Disabilities Act of 1990 (ADA) 

has defined disability discrimination as the failure to provide a reasonable accommodation to a person with a disability who is otherwise qualified to perform the essential functions of his or her job. 

Further, in 1999 the Supreme Court held in Olmstead v. L.C. that 

‘‘unjustified isolation’’ of individuals with disabilities is discrimination and a violation of Title II of the ADA (which prohibits discrimination on the basis of disability in all services, programs, and 

activities provided to the public by state and local governments).156

The decision became known as the ‘‘integration mandate’’ as the 

Court held that public entities must provide community-based services to individuals with disabilities when the services are appropriate, if the individual wants the services, and if the services can 

be reasonably accommodated. The decision underscored the importance of the four goals of the ADA: that individuals with disabilities have a right to independent living, equal opportunities, economic self-sufficiency, and full participation in society. 

During an exchange at the February 7th hearing between Ms. 

Gupta and Congressman Andy Levin (D–MI–9), they discussed the 

intersection of the ADA and phasing out 14(c): 

Mr. Levin: [. . .] The FLSA has a provision, section 

14(c), as you know, that allows individuals with disabilities 

to be paid a subminimum wage. As your testimony states, 

some are paid as little as pennies an hour. Why is it important to phase out 14(c) to ensure all people in this country are paid a fair wage, as these groups are requesting? 

Ms. Gupta: Thank you, Congressman. Section 14(c) of 

the FLSA was actually written at a time when individuals 

with disabilities were predominantly housed in institutions 

and endured long-term segregation. At that time, there 

were no statutory requirements that would support individuals with disabilities in the workplace, and individuals 

with disabilities didn’t actually have legal protections from 


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157 House Comm. on Educ. and Labor, Gradually Raising the Minimum Wage to $15: Good 

for Workers, Good for Business, Good for the Economy, YouTube (Feb. 7, 2019), https:// 

www.youtube.com/watch?v=JDGkim7aaHI (question and answer between Mr. Levin and Mr. 

Gupta at 6:15:10). 158 Halle Stockston, Vermont Closed Workshops for People with Disabilities; What Happened 

Next, Public Source (Sept. 24, 2014), https://www.publicsource.org/vermont-closed-workshops-forpeople-with-disabilities-what-happened-next/#.VLQ0V9LF8fY. 159 Chris Serres, Inclusion Pays Off, Star Tribune (Nov. 11, 2015), http://www.startribune.com/ 

vermont-took-bold-step-to-end-segregation-of-disabled-adults/330697181/#/. 

discrimination. And when Congress passed the ADA in 

1990, it ushered in a new era, and then the Supreme 

Court issued their Olmstead versus L.C. opinion. And the 

reality is that people with disabilities deserve to work 

alongside friends, peers, and neighbors without disabilities. They deserve to earn fair wages, to access equal opportunity for advancement. And the 14(c) of the FLSA has 

really locked classes of people with disabilities, particularly with intellectual and developmental disabilities, into 

really degrading subminimum wage and sheltered workshops. 

Mr. Levin: And I assume it almost assures their continued dependence on family or Federal dollars of other kinds 

to be able to live and have food and shelter and so forth. 

Ms. Gupta: That is right. It has created an increased 

long-term dependency and, of course, this also can create 

deeply kind of humiliating and personal experiences that 

make people with disabilities feel like kind of subhuman.157

Despite congressional inaction, six states and the city of Seattle, 

Washington, have taken steps to phase out 14(c) certificates. 

Vermont was the first state to phase out 14(c) certificates; beginning in 1996 and ending in 2002, the state defunded entities holding 14(c) certificates. Oregon and Rhode Island are in the process 

of phasing out 14(c) certificates after settling a lawsuit with the 

Obama Administration’s Department of Justice on cases alleging 

violations under the ADA. In 2018, Seattle became the first city to 

phase out the use of 14(c) certificates. This is notable as Seattle 

was among the first cities to pass a law raising its minimum wage 

to $15 an hour. 

Opponents of phasing out of 14(c) certificates contend that eliminating 14(c) certificates will leave individuals with disabilities 

without employment. However, thoughtful and well-planned supports for individuals and for employers holding 14(c) certificates 

can help transition workplaces and avoid job loss for these individuals. States that have phased out 14(c) have found that individuals 

with disabilities continue to work and contribute to their local 

economies. Vermont reports that 62 percent of individuals with disabilities in the state find work in the community within one year 

of receiving state employment supports.158 Since 2005, Vermont 

has seen individuals with disabilities pay $11.9 million in payroll 

taxes, and the state has reduced Social Security and other social 

services by over $5.5 million.159

Another common criticism of phasing out of 14(c) certificates is 

that individuals with disabilities cannot be as productive as workers without disabilities and therefore cannot be paid a regular 

wage. Individuals with disabilities have their wages calculated 


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160Gov’t Accountability Office, Special Minimum Wage Program: Centers Offer Employment 

and Support Services to Workers with Disabilities, but Labor Should Improve Oversight 4 

(2001), https://www.gao.gov/new.items/d01886.pdf. 161 House Comm. on Educ. and Labor, Gradually Raising the Minimum Wage to $15: Good 

for Workers, Good for Business, Good for the Economy, YouTube (Feb. 7, 2019), https:// 

www.youtube.com/watch?v=JDGkim7aaHI (statement by Ms. Gupta at 5:18:59). 162 Nat’l Core Indicators, What work means: What does NCI tell us about the quality of life 

of adults with intellectual and developmental disabilities who are employed in the community? 

5 NCI Data Brief 7 (2011), http://www.nationalcoreindicators.org/upload/core-indicators/ 

NCI_Data_Brief-_Employment-_Issue_5_Dec_2011_FINAL_1.pdf 

under 14(c) certificates based on time trials that have no oversight 

and are not compliant with the ADA. Thus, the very nature of the 

calculation is discriminatory. While some employer advocates of 

14(c) certificates suggest subminimum wage employment leads to 

higher-paying jobs, GAO found that in 2000 only ‘‘[a]bout 13 percent of all 14(c) workers in work centers left the center; about 5 

percent of the workers left to take a job in the community earning 

either special minimum wages or at least the minimum wage.’’ 160

Ms. Gupta stated during her testimony at the February 7th hearing: 

[U]nfortunately, 20 years after Olmstead and almost 30 

years after the passage of the ADA, too many people with 

disabilities spend their time in segregated workshops or 

day programs with some paid just pennies per hour. While 

in theory segregated settings provide job training and experience to people with disabilities and help them find regular employment in their community, the reality is that 

too many remain stuck in segregated settings for years.161

Phasing out 14(c) will allow workers with disabilities to earn the 

same wage as other workers and will prevent discrimination on the 

basis of disability. 

Eliminating 14(c) will have additional positive impacts on individuals with disabilities. When transitioning to competitive employment, research has shown that individuals with disabilities spend 

more time engaged in and contributing to their communities and 

developing meaningful natural supports.162 Individuals with disabilities will also have more money from their paychecks to spend 

in their communities and contribute to the local economy. 

During the February 7th hearing, Ms. Gupta and Congressman 

Joseph Morelle (D–NY–25) discussed the positive impacts of phasing out 14(c) for individuals with disabilities who move into competitive, integrated employment: 

Mr. Morelle: [. . .] Let me just in closing, six States, as 

you mentioned, have completed or are in the process of 

phasing out 14(c). I think Vermont and New Hampshire 

have completely phased out. Maryland, Alaska, Oregon 

and Rhode Island are in the process of it, and I understand Hawaii and Kentucky are at least considering it. 

Can you just talk about the other benefits individuals 

with disabilities experience other than financial benefits 

from the phasing out of 14(c) and moving into a competitive integrated employment setting? 

Ms. Gupta: Yes. I mean, so much of what we are talking 

about today is really about the dignity of work and people 

with disabilities feeling the dignity of being human beings 

entitled to the same protections as any other people in this 


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163 House Comm. on Educ. and Labor, Gradually Raising the Minimum Wage to $15: Good 

for Workers, Good for Business, Good for the Economy, YouTube (Feb. 7, 2019), https:// 

www.youtube.com/watch?v=JDGkim7aaHI (question and answer between Mr. Morelle and Ms. 

Gupta at 6:28:06). 164Fair Labor Standards Amendments of 1966, P.L. 89–601, 80 Stat. 830. 165 42 Cong. Rec. H9850 (daily ed. Aug. 2, 1996) (statement of Representative Goodling). The 

1996 Amendments to the Fair Labor Standards Act (H.R. 3448) contained the permanent provision for a youth minimum wage. This language was based on House Amendment 1085 offered 

by Rep. Goodling for H.R. 1227 (104th Congress), approved May 23, 1996. During debate of H.R. 

3448, Representative Goodling stated ‘‘Many studies support the conclusion that a mandated increase in the minimum wage would jeopardize . . . young Americans looking for their first 

job. . .’’ Id. 166Sylvia A. Allegretto et al., Do Minimum Wages Really Reduce Teen Employment? 50 (2) 

Industrial Relations 205, 221 (2011), http://irle.berkeley.edu/files/2011/Do-Minimum-Wages-Really-Reduce-Teen-Employment.pdf; Arindrajit Dube et al., supra note 116 at 699. 167 Allegretto et al., supra note 166, at 228. 168 ‘‘The opportunity wage allows employers to pay new hires under the age of 20 not less than $4.25 per hour for the first 90 calendar days of employment. This will encourage employers to 

hire new workers . . . .’’ Conference Report On H.R. 3448, supra note 163. 169 Reich Testimony at 17. 

country and being able to participate in the mainstream 

economy with people without disabilities, to have the opportunity, to have equal opportunity for jobs and housing 

and the like. And that this move from the ADA to 

Olmstead and beyond is really about ensuring that people 

with disabilities have equal opportunity and are not kind 

of considered, you know, folks to be segregated out of the 

mainstream economy.163

The subminimum wage for workers under 20 years of age 

Under the FLSA, an employer may pay employees under 20 years of age a subminimum wage of $4.25 an hour for the first 90 

calendar days of employment. This provision was added to the 

FLSA in 1996 164 based on the false assumptions that an increase 

in the federal minimum wage leads to increased unemployment 

among teenagers.165 However, research shows that minimum wage 

increases do not reduce employment among teenagers.166 In fact, 

research suggests a higher minimum wage may be especially beneficial for teenaged workers of color who often have higher barriers 

to employment and may be unable to afford the supports and services they need, such as transportation, to seek and maintain employment.167

The subminimum was also established with the purpose of creating job opportunities for young workers.168 However, there is no 

employer reporting of the use of the youth minimum wage, and it 

is believed to be rarely used. As Dr. Reich testified at the February 

7th hearing, ‘‘[t]hese considerations suggest that the federal youth 

subminimum wage is not accomplishing its intended purpose.’’ 169

Many teenage workers are from low-income families, and their 

earnings are an important contribution to their households’ incomes. Mr. Brodeur testified at the February 7th hearing about the 

decision to reject a subminimum wage for teen workers when increasing the state’s minimum wage: 

Initially, I was intrigued by the concept, and from my efforts on workforce development issues as well as my own 

experience, I understood the lifelong benefits of learning 

the value and dignity of work at a young age. However, as 

I continued to meet with my constituents and review expert testimony submitted to my committee, I again determined that this policy would adversely impact the very 


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170 Broduer Testimony at 4 (internal citation omitted). 171Wise Testimony at 1. 172 U.S. Dep’t of Educ., Profile of Undergraduate Students: 2011–12 5 (2014), https:// 

nces.ed.gov/pubs2015/2015167.pdf. 173 Elisabeth Hovdhaugen, Working While Studying: the Impact of Term-time Employment on 

Dropout Rates, 28 Journal of Educ. and Work 631, 631–51 (2015). 174 Vanita Testimony at 8. 

population it was designed to help. Among families in 

Massachusetts whose earnings are at the bottom 20th percentile, teen workers bring home nearly 18% of the family 

income. These teens are not merely working a summer job 

for extra spending money, but are instead functioning as 

breadwinners for their families. To tell these hardworking 

young people that their work product or services, which 

might be rendered alongside and identical to those of an 

older worker, are somehow less valuable because of their 

age was unacceptable to me.170

Eliminating the subminimum wage for teenaged workers and 

raising the minimum wage generally may also help improve educational outcomes. For young workers, increased earnings may reduce the likelihood of working substantial hours while in school, 

helping them better balance work and school. Mr. Wise underscored this point during his testimony at the February 7th hearing: 

I was a great student and by the eighth grade was in advanced placement classes. My teachers said, ‘‘Terrence 

you’re going to do great things. You can be anything.’’ I 

wanted to be a Gamecock at the University of South Carolina. I was going to be a writer. But I went to work at age 

16 to try to help my family survive. One day I came home 

from school, there were no lights or food in the fridge and 

I couldn’t do homework without food and lights. 

So I went and got my first job at Taco Bell. I only made 

$4.25 an hour, which I believe was the minimum wage at 

the time but I knew my family needed the money—desperately. My first paycheck was $150. It went to the light 

bill. One job wasn’t enough. So I got a second job at 

Wendy’s to bring in more money for my family. I tried to 

balance both work and school. I had As in AP History, 

English, Science, and Math. I started falling asleep in 

class. My teachers asked, ‘‘Terrence, what’s wrong?’’ I told 

them I was working two jobs. I didn’t need my AP Calculus to run the numbers at home. There simply wasn’t 

enough money for basic necessities. I had left school and 

my dream of college behind. At 17, I became a full-time 

worker and was left with no other choice but to dropout of 

school.171

Nearly half of U.S. students pursuing a two-year degree, and 

over 40 percent of students pursuing a four-year degree, work more 

than 35 hours per week.172 Studies show that working more than 

20 hours per week puts college students at risk of dropping out.173

Ms. Gupta also testified at the February 7th hearing that Congress should be concerned about the ‘‘potential negative consequences of the youth minimum wage on food insecurity faced by 

too many college students today.’’ 174 A 2018 Wisconsin HOPE Lab 


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175 Vanessa Romo, Hunger and Homelessness are Widespread Among College Students, Study 

Finds, Nat’l Pub. Radio (April 3, 2018, 8:48 PM), https://www.npr.org/sections/thetwo-way/2018/ 

04/03/599197919/hunger-and-homelessness-are-widespread-among-college-students-study-finds. 176 Nat’l Emp’t Law Project, Workers in all 50 States will Need $15 an Hour by 2024 to Afford 

the Basics 1 (2017), https://s27147.pcdn.co/wp-content/uploads/workers-in-all-50-states-will-need15-by-2024.pdf. 177 As determined by the Census Bureau. 178Living Wage Calculator, Massachusetts Institute of Technology, http://livingwage.mit.edu. 179Zipperer Testimony 6. 

survey of 43,000 students at 66 institutions in 20 states and the 

District of Columbia found that 36 percent of students at 4-year institutions were food insecure, including 47 percent of Black students, 42 percent of Hispanic students, and 46 percent of Pell 

Grant recipients.175

FEDERAL ACTION IS NEEDED TO ENSURE THE MINIMUM WAGE IS A

STRONG, UNIFORM FEDERAL WAGE FLOOR

The FLSA sets a federal floor for the minimum wage, and states 

and localities are free to build upon that floor and establish higher 

minimum wages. In states with weak labor standards or low union 

density, a federal minimum wage may be the only effective labor 

market institution that elevates wages for low-paid workers. The 

fact that wages are lower in states with weaker labor standards 

suggests that a wage floor has a greater impact for workers in 

those states. Restoring the value of the federal minimum wage to 

ensure the minimum wage is a strong, uniform federal wage floor 

is key for these workers. Raising the federal minimum wage to $15 by 2024, as H.R. 582 

would do, creates a strong national wage that will protect covered 

workers no matter where they live. By 2024, $15 an hour (the 

equivalent of approximately $13 in 2019 dollars) is the minimum 

amount a single adult working full time will need to earn to cover 

basic living expenses.176 Even in the area with the lowest cost of 

living in the country Beckley, West Virginia 177 in 2024, a two-par- ent, two-child household in which both parents earn $15 an hour 

and pay taxes will only have $1 left each month after covering 

basic living expenses, according to calculations based on MIT’s Living Wage Calculator.178 As Dr. Zipperer testified at the February 

7th hearing: 

By 2024, in areas all across the United States, even a 

single adult with no children will need to be earning more 

than $15 per hour on a full-time, full-year basis in order 

to achieve a modest but adequate standard of living . . . 

[e]arning at least $15 per hour will be a necessity for parents who wish to raise families. Two adults working 40 

hours a week at $15 per hour will earn $62,400 per year. 

If these two adults have two children to care for, by 2024 

there will be no area in the country where they can live 

and meet the basic requirements of their family budget 

with wage income alone.179

Failing to ensure workers across the country have a strong, uniform wage floor risks workers falling farther behind. This is especially true where states enact preemption laws to block local efforts 

to increase the minimum wage at the municipal or county level. 

Currently, 17 of the 21 states at the $7.25 an hour federal minimum have enacted preemption laws. During her testimony at the 


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180 Eckhouse Testimony at 2. 181Wise Testimony at 3. 182Several worker advocacy groups and civil rights groups have challenged the state legislature’s actions in court. 183Gupta Testimony at 9. 184See Sean Farhang & Ira Katznelson, The Southern Imposition: Congress and Labor in the 

New Deal and Fair Deal 19 (2005), https://gspp.berkeley.edu/assets/uploads/research/pdf/article_4.pdf. 

February 7th hearing, Ms. Eckhouse lamented how her home state 

of Iowa enacted a law preventing cities and counties from setting 

a higher minimum wage, even as the state is unlikely to raise its 

minimum wage above the current federal rate of $7.25 an hour. 

Ms. Eckhouse stated that ‘‘[w]e need a federal increase to ensure 

that wherever people live and work in Iowa or around the country, 

they can meet their basic needs.’’ 180 Mr. Wise also testified about 

his state’s efforts to block local increases to the minimum wage at 

the February 7th hearing: 

75% of voters in Kansas City voted for a $15 minimum 

wage in 2017. Workers won that victory by taking big, 

bold, and dramatic actions like going on strike, marching, 

and sleeping on the steps of City Hall for a week in our 

‘‘Fast for $15.’’ It was a huge victory for us until the state 

legislature pre-empted the minimum wage, returning it to 

$7.65. Missouri voters increased the minimum wage in 

2018 but we’re still not achieving $15 per hour—the minimum we need to support our families. That’s why we need 

Congress to take action immediately to raise the federal 

minimum wage.181

Ms. Gupta, during her testimony at the February 7th hearing, 

highlighted a similar occurrence in Alabama, where state legislators in Alabama nullified the Birmingham City Council’s vote to increase the minimum wage—an effort led by workers and faith leaders.182 Ms. Gupta quoted Derrick Johnson, CEO of the NAACP, 

who noted, ‘‘[t]he state’s legislature must be held accountable for 

discriminating against hard working Birmingham citizens fighting 

to get out of poverty.’’ 183

A regionalized minimum wage would leave workers and communities behind 

The notion of a regionalized minimum wage is not new. During 

the debates leading up to the passage of the FLSA, Southern legislators who feared a national wage floor would create wage equity 

between white workers and workers of color proposed a regional 

approach that would have maintained racial wage disparities.184

Civil rights leaders at the time strongly opposed this approach, and 

Congress ultimately rejected a regional approach. In fact, every 

time Congress has considered a regional approach, it has rejected 

it. 

A regionalized minimum wage would permanently lock in lower 

wages, especially in certain Southern states where depressed wages 

are a result of a history of racially discriminatory policies. As Ms. 

Gupta testified at the February 7th hearing, ‘‘[t]en of the 21 states 

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185Gupta Testimony at 9 (internal citation omitted). 186 Econ. Policy Inst. et al., The Federal Minimum Wage Should be a Robust National Wage 

Floor, Not Adjusted Region by Region 2 (2019), https://www.epi.org/files/uploads/minimum-wagefact-sheet-2019.pdf. 187 House Comm. on Educ. and Labor, Gradually Raising the Minimum Wage to $15: Good 

for Workers, Good for Business, Good for the Economy, YouTube (Feb. 7, 2019), https:// 

www.youtube.com/watch?v=JDGkim7aaHI (statement by Dr. Spriggs at 3:09:40). 188 John Abowd et al., Persistent Inter-industry Wage Differences: Rent Sharing and Opportunity Costs, IZA Journal of Labor Econs. 1, 22 (2012). 189 Reich Testimony at 14. 

lations.’’ 185 Analysis of a recent proposal to regionalize the minimum wage found that 15.6 million fewer workers would receive a 

raise than under H.R. 582, and over one-third of those left behind—5.6 million—would be women of color.186 As Dr. Spriggs testified at the February 7th hearing: 

If you agree to those regional pay ideas, which Congress 

debated extensively in 1937 and rejected, extensively in 

1966 and rejected, you won’t be accepting a new idea, you 

will be cementing an old idea that got rejected twice and 

you will create a racial pay disparity. It will be, once 

again, America understands the problem, we are going to 

pass a labor law that improves the lives of American workers, and Black workers will be told, the bus is full when 

it pulls out. If you do that, that is what you will be 

doing.187

A regionalized minimum wage would weaken the federal minimum wage as a counterweight to outsized employer bargaining 

power, especially in rural areas. Research suggests that low wages 

for employees in low-wage industries can often be attributed to the 

employer’s bargaining power to set low wages, rather than an employee’s work experience or education.188 A strong national floor 

serves as a counterweight to this bargaining power, while lower 

federal minimum wages based on region lock in this wage depression. A single national minimum wage as a counterweight is especially important for small-towns or rural areas where often only a 

few companies are the main source of employment and thus are 

able to keep wages low for entire regions. 

A regional minimum wage would rob low-wage states and areas 

of economic stimulus. As discussed above, when low-wage workers 

have increases in income, they spend that money locally, stimulating their local economies. Because the increases in income will 

be larger for workers in low-wage states and areas, these places 

will also benefit from a greater stimulus effect. Creating a lower 

minimum wage for these areas deprives these local economies of 

the full economic stimulus of minimum wage increases. Additionally, higher minimum wages can also help states keep workers who 

are in their prime earning years, leaving these states with a betterquality workforce that attracts businesses into the state.189

In fact, by rejecting a regional approach in the 1930s and 1960s 

and setting a strong national standard, Congress had a positive, 

dynamic effect on economies in the South. As Dr. Reich testified at 

the February 7th hearing: 

By establishing a single national floor at a time of other 

major economic transformations, Congress set in motion a 

series of substantial positive economic changes in the 

South. In particular, the isolated economies of the rural 


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190 Reich Testimony at 16 (citation omitted). 191Michael Reich et al., The Employment Effects of a $15 Minimum Wage in the U.S. and 

in Mississippi: A Simulation Approach 42 (2019), http://irle.berkeley.edu/files/2019/02/The-Employment-Effects-of-a-15-Minimum-Wage-in-the-US-and-in-Mississippi.pdf. 

South became more linked to the national economy. The 

South prospered in succeeding decades, and the southern 

regional wage differential became much smaller. A similar 

development occurred as a result of the civil rights revolution and the associated extension of Fair Labor Standard 

Act coverage to more of the South’s industries [sic].190

This positive impact of a strong, uniform federal minimum wage 

floor on the Southern economy could continue. For example, recent 

research evaluating the impact of a $15 an hour minimum wage in 

2024 on Mississippi estimates a net gain in employment of approximately 2,000 jobs by 2024. This would be equal to 0.1 percent of 

total employment in Mississippi.191

The Committee is also concerned that a regional minimum wage 

would hamper DOL’s enforcement of the federal minimum wage, 

making it harder to ensure workers get the pay they are owed. Already, DOL has limited resources for ensuring workers are paid 

federal minimum wage. It is unclear how a multiplicity of regional 

federal minimum wages will impact the time and resources needed 

to investigate and enforce minimum wage standards, especially for 

employers that operate in multiple metropolitan statistical areas 

within a given state or region. 

SECTION-BY-SECTION ANALYSIS

Section 1. Short title 

This section states that the title of the bill is the Raise the Wage 

Act (the Act). 

Section 2. Minimum wage increases 

Federal Minimum Wage. The Act increases the federal minimum 

wage ‘‘6(a)(1) wage.’’ for employees over a six-year period. In the 

first year (2019), the federal minimum wage will increase by $1.30 

from $7.25 to $8.55 per hour. This increase will occur on the first 

day of the third month that begins after the date of enactment of 

the Act (the effective date). One year after the effective date, the 

minimum wage will increase by $1.30 to $9.85; two years after the 

effective date it will increase by $1.30 to $11.15; three years after 

the effective date, it will increase by $1.30 to $12.45; four years 

after the effective date, it will increase by $1.30 to $13.75; and five 

years after the effective date, the minimum wage will increase by 

$1.25 to $15.00. Six years after the effective date (2025), the minimum wage will be indexed to median wages. 

Annual Indexing of Minimum Wage Based on Median Wages. Six 

years after enactment, and each subsequent year, the minimum 

wage will increase based on the percentage increase, if any, in the 

median hourly wages of all employees. The Secretary of Labor, 

through the Bureau of Labor Statistics (BLS), will calculate this 

change by compiling data on the hourly wages of all employees. 

The minimum wage will not decrease based on BLS’ calculation. 


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Section 3. Tipped employees 

The Act increases the tipped wage from $2.13 to $3.60 in 2019. 

For each succeeding year, the Act increases the tipped wage by the 

lesser of either $1.50 or the difference between the tipped wage and 

the 6(a)(1) wage. Once the tipped wage reaches the 6(a)(1) wage in 

2027, the Act eliminates the tipped wage by stipulating that the 

tipped wage will be the 6(a)(1) wage. 

This section also clarifies that any employee has the right to retain any tips received by such employee. 

Section 4. Newly hired employees who are less than 20 years old 

The Act increases the minimum wage for youth under 20 years 

of age from $4.25 to $5.50 in 2019. Each subsequent year, the Act 

increases the youth wage by the lesser of either $1.25 or the difference between the youth wage and the 6(a)(1) wage. Once the 

youth wage reaches the 6(a)(1) wage in 2027, the Act eliminates 

the youth wage by stipulating that the youth wage will be the 

6(a)(1) wage. 

Section 5. Publication of notice of changes to the minimum wage 

The Act requires the Secretary of Labor to publish in the Federal 

Register and on DOL’s website announcements of the increases in 

the 6(a)(1), tipped, 14(c), and youth wages sixty days prior to each 

effective date. 

Section 6. Promoting economic self-sufficiency for individuals with 

disabilities 

The Secretary of Labor will discontinue issuing 14(c) certificates 

on the date of enactment of the Act. Existing 14(c) certificate holders will be permitted to continue using their subminimum wage 

certificates for six years after enactment. Certificate holders will 

increase the hourly wages paid to individuals with disabilities who 

are being paid subminimum wages pursuant to 14(c) on the following schedule: one year after the 6(a)(1) wage takes effect (the 

effective date), the subminimum wage paid shall be at least $4.25; 

two years after the effective date, the subminimum wage paid shall 

be at least $6.40; three years after the effective date, the subminimum wage paid shall be at least $8.55; four years after the effective date, the subminimum wage paid shall be at least $10.70; and 

five years after the effective date, the subminimum wage paid shall 

be at least $12.85. Six years after the effective date, the subminimum wage paid to 14(c) covered employees must be the same as 

the 6(a)(1) wage. During the six years of transition to the 6(a)(1) 

wage, the Secretary of Labor shall, upon request, assist certificate 

holders with compliance and continuing employment opportunities 

for individuals with disabilities. 

Section 7. General effective date 

Unless otherwise provided for in the Act, the amendments made 

by the Act take effect on the first day of the third month that begins after the date of enactment. The effective date in the Commonwealth of the Northern Mariana Islands is 18 months after the 

Act’s general effective date. 


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Section 8. GAO report 

The Act requires the Government Accountability Office (GAO) to 

review the economic conditions in the Commonwealth of the Northern Mariana Islands, estimate the proportion of employees directly 

affected by wage increases under the Act (disaggregated by industry and occupation), and submit a report to Congress within one 

year after H.R. 582’s enactment. 

EXPLANATION OF AMENDMENTS

The Amendment in the Nature of a Substitute is explained in the 

descriptive portions of this report. 

APPLICATION OF LAW TO THE LEGISLATIVE BRANCH

Pursuant to section 102(b)(3) of the Congressional Accountability 

Act, Pub. L. No. 104–1, H.R. 582, as amended, applies to terms and 

conditions of employment within the legislative branch by amending the FLSA. 

UNFUNDED MANDATE STATEMENT

Pursuant to Section 423 of the Congressional Budget and Impoundment Control Act (as amended by Section 101(a)(2) of the Unfunded Mandates Reform Act, Pub. L. No. 104–4), the Committee 

adopts as its own the estimate of and statement regarding federal 

mandates in H.R. 582, as amended, prepared by the Director of the 

Congressional Budget Office. 

EARMARK STATEMENT

In accordance with clause 9 of rule XXI of the Rules of the House 

of Representatives, H.R. 582 does not contain any congressional 

earmarks, limited tax benefits, or limited tariff benefits as described in clauses 9(e), 9(f), and 9(g) of rule XXI. 

ROLL CALL VOTES

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the following 

roll call votes occurred during the Committee’s consideration of 

H.R. 582: 


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STATEMENT OF PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause (3)(c) of rule XIII of the Rules of the House 

of Representatives, H.R. 582 would update current law to increase 

the federal minimum wage, phase out subminimum wages for teenaged and tipped workers, and eliminate subminimum wage certificates for individuals with disabilities in an effort to increase workers’ wages, decrease poverty, and stimulate local economies. 

DUPLICATION OF FEDERAL PROGRAMS

Pursuant to clause 3(c)(5) of rule XIII of the Rules of the House 

of Representatives, the Committee states that no provision of H.R. 

582 establishes or reauthorizes a program of the Federal Government known to be duplicative of another federal program, a program that was included in any report from the Government Accountability Office to Congress pursuant to section 21 of Public 

Law 111–139, or a program related to a program identified in the 

most recent Catalog of Federal Domestic Assistance. 

HEARINGS

Pursuant to section 103(i) of H. Res. 6 for the 116th Congress, 

the Committee held a legislative hearing entitled ‘‘Gradually Rais- ing the Minimum Wage to $15: Good for Workers, Good for Businesses, and Good for the Economy,’’ which was used to consider 

H.R. 582. The Committee heard testimony on the declining value 

of the federal minimum wage and its impact on workers, how increasing the minimum wage will raise wages for workers with little 

to no negative employment impacts, and the benefits to businesses 

and local economies from minimum wage increases. The Committee 

heard testimony from Dr. William Spriggs, Chief Economist at the 

AFL-CIO; Mr. Terrence Wise, a shift manager at McDonald’s; Dr. 

Douglas Holtz-Eakin, President of the American Action Forum; Dr. 

Ben Zipperer, Economist at the Economic Policy Institute; Ms. 

Vanita Gupta, President and CEO of the Leadership Conference on 

Civil and Human Rights; Ms. Simone Barron, a server in a full 

service restaurant; Ms. Kathy Eckhouse, owner of La Quercia; Dr. 

Michael Strain, Resident Scholar and Director of Economic Policy 

Studies at the American Enterprise Institute; Dr. Michael Reich, 

Professor at University of California Berkeley; and Mr. Paul 

Brodeur, Massachusetts State Representative. 

STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF

THE COMMITTEE

In compliance with clause 3(c)(1) of rule XIII and clause 2(b)(1) 

of rule X of the Rules of the House of Representatives, the Committee’s oversight findings and recommendations are reflected in the 

descriptive portions of this report. 

NEW BUDGET AUTHORITY AND CBO COST ESTIMATE

Pursuant to clause 3(c)(2) of rule XIII of the Rules of the House 

of Representatives and section 308(a) of the Congressional Budget 

Act of 1974, and pursuant to clause 3(c)(3) of rule XIII of the Rules 

of the House of Representatives and section 402 of the Congressional Budget Act of 1974, the Committee has received the folVerDate Sep 11 2014 08:01 Jul 13, 2019 Jkt 089006 PO 00000 Frm 00056 Fmt 6659 Sfmt 6602 E:\HR\OC\HR150.XXX HR150

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lowing estimate for H.R. 582 from the Director of the Congressional 

Budget Office: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, April 22, 2019. 

Hon. BOBBY SCOTT, 

Chairman, Committee on Education and Labor, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 582, the Raise the Wage 

Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Meredith Decker. 

Sincerely, 

MARK P. HADLEY, 

(For Keith Hall, Director). 

Enclosure. 

The bill would 

• Increase the federal minimum wage in six annual steps, 

from $7.25 per hour to $15 per hour, and then adjust the wage 

annually thereafter to keep pace with the median hourly wage 

• Increase spending subject to appropriation by increasing 

the wages of some federal workers 

• Increase off-budget direct spending by increasing the 

wages of some postal workers 

• Impose intergovernmental and private-sector mandates by 

requiring employers to pay a higher minimum wage to employees who are covered under the Fair Labor Standards Act 

Estimated budgetary effects would primarily stem from 

• Increasing the wages of some federal employees 

Areas of significant uncertainty include 

• Projections of increases in the median hourly wage and 

wage growth for federal workers over the next decade 


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Bill summary: H.R. 582 would amend the Fair Labor Standards 

Act (FLSA) to increase the federal minimum wage in six annual 

steps from $7.25 per hour to $15 per hour in 2025 (shortly after 

enactment, the minimum wage would be $8.55 per hour). After 

2025, the minimum wage would be adjusted annually to account 

for changes in the median hourly wage of all workers. By 2029, the 

minimum wage would be $16.82, CBO estimates. In addition, the 

bill would repeal the separate federal minimum cash wage for 

workers who receive tips by gradually raising that wage until it 

equals the federal minimum wage for nontipped workers. Finally, 

H.R. 582 would repeal the separate minimum wage for teenage 

workers and workers with disabilities by raising their wages gradually to equal the federal minimum wage. 

Estimated Federal cost: The estimated budgetary effect of H.R. 

582 is shown in Table 1. The costs of the legislation fall within all 

budget functions except 950 (undistributed offsetting receipts). 

TABLE 1.—ESTIMATED BUDGETARY EFFECTS OF H.R. 582 

By fiscal year, millions of dollars— 

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2019– 

2024 

019– 

2029 

Increases in Off-Budget Direct Spending 

Estimated Budget Authority ............... 0 0 0 0 * * * * * * * * 1 

Estimated Outlays .............................. 0 0 0 0 * * * * * * * * 1 

Increases in Spending Subject to Appropriation 

Estimated Authorization ..................... 0 * * 1 2 6 11 14 14 14 14 9 76 

Estimated Outlays .............................. 0 * * 1 2 6 11 14 14 14 14 9 76 

* = between zero and $500,000. 

Basis of estimate: For this estimate, CBO assumes that the legislation will be enacted by October 1, 2019, and that starting in 

2020, the minimum wage would rise incrementally, reaching $15 in 

2025. In subsequent years, the minimum wage would increase to 

keep pace with the increase in median hourly earnings. 

Increasing the minimum wage would directly affect the federal 

budget by raising the pay of a small group of federal employees 

who are paid an hourly wage. This estimate accounts only for those 

direct effects on the budget. 

H.R. 582 also would indirectly affect the budget by boosting the 

prices of some goods and services that the government purchases. 

Tax receipts and federal spending for health and income security 

programs also would be indirectly affected as income increases for 

some people and falls for others. Without further analysis, CBO 

cannot estimate whether the net result of those indirect effects over 

the coming decade would be to increase or decrease budget deficits. 

Direct spending (off-budget): Currently, all Postal Service employees earn more than $8.55 per hour. Using information from the 

Postal Service, CBO estimates that under H.R. 582, about 100 employees would receive pay increases to minimum hourly rates starting in 2023. CBO estimates that raising wages for the affected 

workers in step with the provisions of H.R. 582 would increase direct spending by less than $150,000 per year over the 2023–2029 

period, with a cumulative cost of about $700,000 over the 2020– 

2029 period. Changes in the cost of operating the Postal Service are 


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reflected in the unified budget as changes in direct spending. The 

Postal Service operations are designated as off-budget. 

Spending Subject to Appropriation: Implementing H.R. 582 would increase spending subject to appropriation by $76 million 

over the next 10 years, CBO estimates. Using information from the 

Office of Personnel Management, CBO estimates that fewer than 

100 workers initially would see a pay increase. As the minimum 

wage increased over time, however, more workers’ pay would rise, 

and by the end of 2029, nearly 7,000 workers’ wages would increase. For most affected employees, the pay raise would be less 

than 50 cents per hour, but for others the raise could be as much 

as $10 per hour. 

Uncertainty: The uncertainty in this estimate depends in part on 

CBO’s projections of various measures of wage growth. CBO uses 

the employment cost index to project wage growth for federal employees because current law explicitly links federal employee pay to 

that index. After reaching $15 per hour in 2025, however, increases 

in the minimum wage would depend on growth in median wages. 

Thus, if growth in one of those two measures diverged significantly 

from the other, outlays could be greater or smaller than CBO estimated. 

Over the past 10 years, policymakers have in some cases constrained increases in federal pay that would have otherwise occurred because of changes in the employment cost index. If that 

trend continued, increases in the minimum wage would probably 

outpace federal wage increases, and a larger group of federal employees would see faster increases in their wages. 

Pay-As-You-Go considerations: The Statutory Pay-As-You-Go Act 

of 2010 establishes budget-reporting and enforcement procedures 

for legislation affecting direct spending or revenues. Only on-budget changes to outlays or revenues are subject to pay-as-you-go procedures. Spending for the Postal Service is classified as off-budget, 

therefore H.R, 582 is not subject to pay-as-you-go procedures. 

Increase in long-term deficits: CBO estimates that enacting H.R. 

582 would not increase on-budget deficits in any of the four consecutive 10-year periods beginning in 2030. 

Mandates: H.R. 582 would impose intergovernmental and private-sector mandates as defined in the Unfunded Mandates Reform 

Act (UMRA) by requiring employers whose workers are covered 

under the FLSA to pay a higher minimum wage. 

CBO estimates that the aggregate additional amount paid to 

those workers to meet the new minimum wage requirements would 

significantly exceed the thresholds established in UMRA for private-sector and intergovernmental entities in each year beginning 

in 2020 and 2021, respectively. In 2019, the intergovernmental 

threshold under UMRA is $82 million and the private-sector 

threshold is $164 million; both are adjusted annually for inflation. 

CBO estimates that by 2025—when the minimum wage under 

H.R. 582 reaches $15 per hour—state, local, and tribal employers 

would be required to pay covered workers $3 billion in additional 

wages annually; the additional annual cost to private-sector employers would be $48 billion. Those amounts do not account for employers’ possible responses to the higher wage requirements, which 

could include reducing hiring, among other responses. If employers 

respond by taking such actions, CBO expects the costs to be lower, 


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but still significantly higher than the thresholds established in 

UMRA. 

CBO estimated the cost of the mandates using monthly data 

from the Census Bureau’s Current Population Survey to estimate 

the distribution of workers’ hourly wages under current law. In 

projecting future hourly wages, CBO accounted for prospective increases in some states’ minimum wage rates, including those coming into effect under current and future state law. 

CBO then identified the subset of workers covered under the 

FLSA whose hourly wages, in CBO’s projections, would fall below 

the schedule of minimum wages set by H.R. 582. For this analysis, 

CBO excluded workers who are not covered by the FLSA—including those in most small businesses and in occupations that generally are exempt from the FLSA under current law—and workers 

whose wages would be more than $15 per hour in 2025. For both 

of those types of workers, CBO expects that employers would incur 

additional costs to increase wages, but such costs would not directly result from the employers’ compliance with the mandate. 

Estimate prepared by: Federal costs: Meredith Decker, Mark 

Grabowicz, Daniel Ready; Mandates: Nabeel Alsalam, Andrew 

Laughlin. 

Estimate reviewed by: Christi Hawley Anthony, Chief, Projections; Sheila Dacey, Chief, Income Security and Education; Susan 

Willie, Chief, Mandates; Kim Cawley, Chief, Natural and Physical 

Resources; H. Samuel Papenfuss, Deputy Assistant Director for 

Budget Analysis; Theresa Gullo, Assistant Director for Budget 

Analysis. 

COMMITTEE COST ESTIMATE

Clause 3(d)(1) of rule XIII of the Rules of the House of Representatives requires an estimate and a comparison of the costs 

that would be incurred in carrying out H.R. 582. However, clause 

3(d)(2)(B) of that rule provides that this requirement does not 

apply when the committee has included in its report a timely submitted cost estimate of the bill prepared by the Director of the Congressional Budget Office under section 402 of the Congressional 

Budget Act. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

H.R. 582, as reported, are shown as follows: 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, 

and existing law in which no change is proposed is shown in 

roman): 

FAIR LABOR STANDARDS ACT OF 1938 

* * * * * * * 


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DEFINITIONS

SEC. 3. As used in this Act— 

(a) ‘‘Person’’ means an individual, partnership, association, corporation, business trust, legal representative, or any organized 

group of persons. 

(b) ‘‘Commerce’’ means trade, commerce, transportation, transmission, or communication among the several States or between 

any State and any place outside thereof. 

(c) ‘‘State’’ means any State of the United States or the District 

of Columbia or any Territory or possession of the United States. 

(d) ‘‘Employer’’ includes any person acting directly or indirectly 

in the interest of an employer in relation to an employee and includes a public agency, but does not include any labor organization 

(other than when acting as an employer) or anyone acting in the 

capacity of officer or agent of such labor organization. 

(e)(1) Except as provided in paragraphs (2), (3), and (4), the term 

‘‘employee’’ means any individual employed by an employer. 

(2) In the case of an individual employed by a public agency, 

such term means— 

(A) any individual employed by the Government of the 

United States— 

(i) as a civilian in the military departments (as defined 

in section 102 of title 5, United States Code), 

(ii) in any executive agency (as defined in section 105 of 

such title), 

(iii) in any unit of the judicial branch of the Government 

which has positions in the competitive service, 

(iv) in a nonappropriated fund instrumentality under the 

jurisdiction of the Armed Forces, 

(v) in the Library of Congress, or 

(vi) the Government Printing Office; 

(B) any individual employed by the United States Postal 

Service or the Postal Rate Commission; and 

(C) any individual employed by a State, political subdivision 

of a State, or an interstate governmental agency, other than 

such an individual— 

(i) who is not subject to the civil service laws of the 

State, political subdivision, or agency which employs him; 

and 

(ii) who— 

(I) holds a public elective office of that State, political subdivision, or agency, 

(II) is selected by the holder of such an office to be 

a member of his personal staff, 

(III) is appointed by such an officeholder to serve on 

a policymaking level, 

(IV) is an immediate adviser to such an officeholder 

with respect to the constitutional or legal powers of 

his office, or 

(V) is an employee in the legislative branch or legislative body of that State, political subdivision, or agency and is not employed by the legislative library of 

such State, political subdivision, or agency. 


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(3) For purposes of subsection (u), such term does not include any 

individual employed by an employer engaged in agriculture if such 

individual is the parent, spouse, child, or other member of the employer’s immediate family. 

(4)(A) The term ‘‘employee’’ does not include any individual who 

volunteers to perform services for a public agency which is a State, 

a political subdivision of a State, or an interstate governmental 

agency, if— 

(i) the individual receives no compensation or is paid expenses, reasonable benefits, or a nominal fee to perform the 

services for which the individual volunteered; and 

(ii) such services are not the same type of services which the 

individual is employed to perform for such public agency. 

(B) An employee of a public agency which is a State, political 

subdivision of a State, or an interstate governmental agency may 

volunteer to perform services for any other State, political subdivision, or interstate governmental agency, including a State, political 

subdivision or agency with which the employing State, political 

subdivision, or agency has a mutual aid agreement. 

(5) The term ‘‘employee’’ does not include individuals who volunteer their services solely for humanitarian purposes to private nonprofit food banks and who receive from the food banks groceries. 

(f) ‘‘Agriculture’’ includes farming in all its branches and among 

other things includes the cultivation and tillage of the soil, dairying, the production, cultivation, growing, and harvesting of any agricultural or horticultural commodities (including commodities defined as agricultural commodities in section 15(g) of the Agricultural Marketing Act, as amended), the raising of livestock, bees, 

fur-bearing animals, or poultry, and any practices (including any 

forestry or lumbering operations) performed by a farmer or on a 

farm as an incident to or in conjunction with such farming operations, including preparation for market, delivery to storage or to 

market or to carriers for transportation to market. 

(g) ‘‘Employ’’ includes to suffer or permit to work. 

(h) ‘‘Industry’’ means a trade, business, industry, or other activity, or branch or group thereof, in which individuals are gainfully 

employed. 

(i) ‘‘Goods’’ means goods (including ships and marine equipment), 

wares, products, commodities, merchandise, or articles or subjects 

of commerce of any character, or any part or ingredient thereof, but 

does not include goods after their delivery into the actual physical 

possession of the ultimate consumer thereof other than a producer, 

manufacturer, or processor thereof. 

(j) ‘‘Producer’’ means produced, manufactured, mined, handled, or 

in any manner worked on in any State; and for the purposes of this 

Act an employee shall be deemed to have been engaged in the production of goods if such employee was employed in producing, manufacturing, mining, handling, transporting, or in any other manner 

working on such goods, or in any closely related process or occupation directly essential to the production thereof, in any State. 

(k) ‘‘Sale’’ or ‘‘sell’’ includes any sale, exchange, contract to sell, 

consignment for sale, shipment for sale, or other disposition. 

(l) ‘‘Oppressive child labor’’ means a condition of employment 

under which (1) any employee under the age of sixteen years is employed by an employer (other than a parent or a person standing 


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in place of a parent employing his own child or a child in his custody under the age of sixteen years in an occupation other than 

manufacturing or mining or an occupation found by the Secretary 

of Labor to be particularly hazardous for the employment of children between the ages of sixteen and eighteen years or detrimental 

to their health or well-being) in any occupation, or (2) any employee between the ages of sixteen and eighteen years is employed 

by an employer in any occupation which the Secretary of Labor 

shall find and by order declare to be particularly hazardous for the 

employment of children between such ages or detrimental to their 

health or well-being; but oppressive child labor shall not be deemed 

to exist by virture of the employment in any occupation of any person with respect to whom the employer shall have on file an unexpired certificate issued and held pursuant to regulations of the Secretary of Labor certifying that such person is above the oppressive 

child labor age. The Secretary of Labor shall provide by regulation 

or by order that the employment of employees between the ages of 

fourteen and sixteen years in occupations other than manufacturing and mining shall not be deemed to constitute oppressive 

child labor if and to the extent that the Secretary of Labor determines that such employment is confined to periods which will not 

interfere with their schooling and to conditions which will not 

interfere with their health and well-being. 

(m)(1) ‘‘Wage’’ paid to any employee includes the reasonable cost, 

as determined by the Secretary of Labor, to the employer of furnishing such employee with board, lodging, or other facilities, if 

such board, lodging, or other facilities are customarily furnished by 

such employer to his employees: Provided, That the cost of board, 

lodging, or other facilities shall not be included as a part of the 

wage paid to any employee to the extent it is excluded therefrom 

under the terms of a bona fide collective-bargaining agreement applicable to the particular employee: Provided further, That the Secretary is authorized to determine the fair value of such board, lodging, or other facilities for defined classes of employees and in defined areas, based on average cost to the employer or to groups of 

employers similarly situated, or average value to groups of employees, or other appropriate measures of fair value. Such evaluations, 

where applicable and pertinent, shall be used in lieu of actual 

measure of cost in determining the wage paid to any employee. 

(2)(A) In determining the wage an employer is required to pay 

a tipped employee, the amount paid such employee by the employee’s employer shall be an amount equal to— 

ø(i) the cash wage paid such employee which for purposes of 

such determination shall be not less than the cash wage required to be paid such an employee on the date of the enactment of this paragraph; and¿ 

(i) the cash wage paid such employee, which for purposes of 

such determination shall be not less than— 

(I) for the 1-year period beginning on the effective date 

under section 7 of the Raise the Wage Act, $3.60 an hour; 

(II) for each succeeding 1-year period until the hourly 

wage under this clause equals the wage in effect under section 6(a)(1) for such period, an hourly wage equal to the 

amount determined under this clause for the preceding 

year, increased by the lesser of— 


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(aa) $1.50; or 

(bb) the amount necessary for the wage in effect 

under this clause to equal the wage in effect under section 6(a)(1) for such period, rounded up to the nearest 

multiple of $0.05; and 

(III) for each succeeding 1-year period after the increase 

made pursuant to subclause (II), the minimum wage in effect under section 6(a)(1); and 

(ii) an additional amount on account of the tips received by 

such employee which amount is equal to the difference between the wage specified in clause (i) and the wage in effect 

under section 6(a)(1). 

The additional amount on account of tips may not exceed the value 

of the tips actually received by an employee. The preceding 2 sentences shall not apply with respect to any tipped employee unless 

such employee has been informed by the employer of the provisions 

øof this subsection, and all tips received by such employee have 

been retained by the employee¿ of this subsection. Any employee 

shall have the right to retain any tips received by such employee, 

except that this subsection shall not be construed to prohibit the 

pooling of tips among employees who customarily and regularly receive tips. An employer shall inform each employee of the right and 

exception provided under the preceding sentence. 

øSubsections (a) and (b) of section 3 of H.R. 582 (as reported) provides for amendments to section 3(m)(2)(A) of the Fair Labor 

Standards Act of 1938, which are shown above. Subsection (c)(1) of 

section 3 of H.R. 582 (as reported) also provides for amendments 

to subparagraph (A) (as amended by subsections (a) and (b) of such 

section 3). Paragraph (3) of section 3(c) of H.R. 582 (as reported) 

provides: ‘‘The amendments made by paragraphs (1) and (2) shall 

take effect on the date that is one day after the date on which the 

hourly wage under subclause (III) of section 3(m)(2)(A)(i) of the 

Fair Labor Standards Act of 1938 (29 U.S.C. 203(m)(2)(A)(i)), as 

amended by subsection (a), takes effect.’’. The following version of 

subparagraph (A) reflects the amendments made to it by subsections (a), (b), and (c)(1) of section 3 of H.R. 582.¿ 

(A) øIn determining the wage an employer is required to pay a 

tipped employee, the amount paid such employee by the employee’s 

employer shall be an amount equal to—¿ 

ø(i) the cash wage paid such employee, which for purposes 

of such determination shall be not less than— 

ø(I) for the 1-year period beginning on the effective date 

under section 7 of the Raise the Wage Act, $3.60 an hour; 

ø(II) for each succeeding 1-year period until the hourly 

wage under this clause equals the wage in effect under 

section 6(a)(1) for such period, an hourly wage equal to the 

amount determined under this clause for the preceding 

year, increased by the lesser of— 

ø(aa) $1.50; or 

ø(bb) the amount necessary for the wage in effect 

under this clause to equal the wage in effect under 

section 6(a)(1) for such period, rounded up to the nearest multiple of $0.05; and 


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ø(III) for each succeeding 1-year period after the increase made pursuant to subclause (II), the minimum 

wage in effect under section 6(a)(1); and 

ø(ii) an additional amount on account of the tips received by 

such employee which amount is equal to the difference between the wage specified in clause (i) and the wage in effect 

under section 6(a)(1). 

The additional amount on account of tips may not exceed the value 

of the tips actually received by an employee. The preceding 2 sentences shall not apply with respect to any tipped employee unless 

such employee has been informed by the employer of the provisions 

of this subsection.¿ The wage required to be paid to a tipped employee shall be the wage set forth in section 6(a)(1). Any employee 

shall have the right to retain any tips received by such employee, 

except that this subsection shall not be construed to prohibit the 

pooling of tips among employees who customarily and regularly receive tips. An employer shall inform each employee of the right and 

exception provided under the preceding sentence. 

(B) An employer may not keep tips received by its employees for 

any purposes, including allowing managers or supervisors to keep 

any portion of employees’ tips, regardless of whether or not the employer takes a tip credit. 

(n) ‘‘Resale’’ shall not include the sale of goods to be used in residential or farm building construction, repair, or maintenance: Provided, That the sale is recognized as a bona fide retail sale in the 

industry. 

(o) HOURS WORKED.—In determining for the purposes of sections 

6 and 7 the hours for which an employee is employed, there shall 

be excluded any time spent in changing clothes or washing at the 

beginning or end of each workday which was excluded from measured working time during the week involved by the express terms 

of or by custom or practice under a bona fide collective-bargaining 

agreement applicable to the particular employee. 

(p) ‘‘American vessel’’ includes any vessel which is documented or 

numbered under the laws of the United States. 

(q) ‘‘Secretary’’ means the Secretary of Labor. 

(r)(1) ‘‘Enterprise’’ means the related activities performed (either 

through unified operation or common control) by any person or persons for a common business purpose, and includes all such activities whether performed in one or more establishments or by one or 

more corporate or other organizational units including departments 

of an establishment operated through leasing arrangements, but 

shall not include the related activities performed for such enterprise by an independent contractor. Within the meaning of this 

subsection, a retail or service establishment which is under independent ownership shall not be deemed to be so operated or controlled as to be other than a separate and distinct enterprise by 

reason of any arrangement, which includes, but is not necessarily 

limited to, an agreement, (A) that it will sell, or sell only, certain 

goods specified by a particular manufacturer, distributor, or advertiser, or (B) that it will join with other such establishments in the 

same industry for the purpose of collective purchasing, or (C) that 

it will have the exclusive rights to sell the goods or use the brand 

name of a manufacturer, distributor, or advertiser within a specified area, or by reason of the fact that it occupies premises leased 


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to it by a person who also leases premises to other retail or service 

establishments. 

(2) For purposes of paragraph (1), the activities performed by any 

person or persons— 

(A) in connection with the operation of a hospital, an institution primarily engaged in the care of the sick, the aged, the 

mentally ill or defective who reside on the premises of such institution, a school for mentally or physicially handicapped or 

gifted children, a preschool, elementary or secondary school, or 

an institution of higher education (regardless of whether or not 

such hospital, institution, or school is operated for profit or not 

for profit), or 

(B) in connection with the operation of a street, suburban or 

interurban electric railway, or local trolley or motorbus carrier, 

if the rates and services of such railway or carrier are subject 

to regulation by a State or local agency (regardless of whether 

or not such railway or carrier is public or private or operated 

for profit or not for profit), or 

(C) in connection with the activities of a public agency. 

shall be deemed to be activities performed for a business purpose. 

(s)(1) ‘‘Enterprise engaged in commerce or in the production of 

goods for commerce’’ means an enterprise that— 

(A)(i) has employees engaged in commerce or in the production of goods for commerce, or that has employees handling, 

selling, or otherwise working on goods or materials that have 

been moved in or produced for commerce by any person; and 

(ii) is an enterprise whose annual gross volume of sales made or business done is not less than $500,000 (exclusive of excise 

taxes at the retail level that are separately stated); 

(B) is engaged in the operation of a hospital, an institution 

primarily engaged in the care of the sick, the aged, or the mentally ill or defective who reside on the premises of such institution, a school for mentally or physically handicapped or gifted 

children, a preschool, elementary or secondary school, or an institution of higher education (regardless of whether or not such 

hospital, institution, or school is public or private or operated 

for profit or not for profit); or 

(C) is an activity of a public agency. 

(2) Any establishment that has as its only regular employees the 

owner thereof or the parent, spouse, child, or other member of the 

immediate family of such owner shall not be considered to be an 

enterprise engaged in commerce or in the production of goods for 

commerce or a part of such an enterprise. The sales of such an establishment shall not be included for the purpose of determining 

the annual gross volume of sales of any enterprise for the purpose 

of this subsection. 

(t) ‘‘Tipped employee’’ means any employee engaged in an occupation in which he customarily and regularly receives more than $30 

a month in tips. 

(u) ‘‘Man-day’’ means any day during which an employee performs any agricultural labor for not less than one hour. 

(v) ‘‘Elementary school’’ means a day or residential school which 

provides elementary education, as determined under State law. 

(w) ‘‘Secondary school’’ means a day or residential school which 

provides secondary education, as determined under State law. 


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(x) ‘‘Public agency’’ means the Government of the United States; 

the government of a State or political subdivision thereof; any 

agency of the United States (including the United States Postal 

Service and Postal Rate Commission), a State, or a political subdivision of a State; or any interstate governmental agency. 

(y) ‘‘Employee in fire protection activities’’ means an employee, 

including a firefighter, paramedic, emergency medical technician, 

rescue worker, ambulance personnel, or hazardous materials worker, who— 

(1) is trained in fire suppression, has the legal authority and 

responsibility to engage in fire suppression, and is employed by 

a fire department of a municipality, county, fire district, or 

State; and 

(2) is engaged in the prevention, control, and extinguishment 

of fires or response to emergency situations where life, property, or the environment is at risk. 

* * * * * * * 

MINIMUM WAGES

SEC. 6. (a) Every employer shall pay to each of his employees 

who in any workweek is engaged in commerce or in the production 

of goods for commerce, or is employed in an enterprise engaged in 

commerce or in the production of goods for commerce, wages at the 

following rates: 

ø(1) except as otherwise provided in this section, not less 

than— 

ø(A) $5.85 an hour, beginning on the 60th day after the 

date of enactment of the Fair Minimum Wage Act of 2007; 

ø(B) $6.55 an hour, beginning 12 months after that 60th 

day; and 

ø(C) $7.25 an hour, beginning 24 months after that 60th 

day;¿ 

(1) except as otherwise provided in this section, not less 

than— 

(A) $8.55 an hour, beginning on the effective date under 

section 7 of the Raise the Wage Act; 

(B) $9.85 an hour, beginning 1 year after such effective 

date; 

(C) $11.15 an hour, beginning 2 years after such effective 

date; 

(D) $12.45 an hour, beginning 3 years after such effective 

date; 

(E) $13.75 an hour, beginning 4 years after such effective 

date; 

(F) $15.00 an hour, beginning 5 years after such effective 

date; and 

(G) beginning on the date that is 6 years after such effective date, and annually thereafter, the amount determined 

by the Secretary under subsection (h); 

(2) if such employee is a home worker in Puerto Rico or the 

Virgin Islands, not less than the minimum piece rate prescribed by regulation or order; or, if no such minimum piece 

rate is in effect, any piece rate adopted by such employer 

which shall yield, to the proportion or class of employees preVerDate Sep 11 2014 08:01 Jul 13, 2019 Jkt 089006 PO 00000 Frm 00067 Fmt 6659 Sfmt 6601 E:\HR\OC\HR150.XXX HR150

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scribed by regulation or order, not less than the applicable 

minimum hourly wage rate. Such minimum piece rates or employer piece rates shall be commensurate with, and shall be 

paid in lieu of, the minimum hourly wage rate applicable 

under the provisions of this section. The Secretary of Labor, or 

his authorized representative, shall have power to make such 

regulations or orders as are necessary or appropriate to carry 

out any of the provisions of this paragraph, including the 

power without limiting the generality of the foregoing, to define any operation or occupation which is performed by such 

home work employees in Puerto Rico or the Virgin Islands; to 

establish minimum piece rates for any operation or occupation 

so defined; to prescribe the method and procedure for 

ascertaining and promulgating minimum piece rates; to prescribe standards for employer piece rates, including the proportion or class of employees who shall receive not less than the 

minimum hourly wage rate; to define the term ‘‘home worker’’; 

and to prescribe the conditions under which employers, agents, 

contractors, and subcontractors shall cause goods to be produced by home workers; 

(3) if such employee is employed as a seaman on an American vessel, not less than the rate which will provide to the employee, for the period covered by the wage payment, wages 

equal to compensation at the hourly rate prescribed by paragraph (1) of this subsection for all hours during such period 

when he was actually on duty (including periods aboard ship 

when the employee was on watch or was, at the direction of 

a superior officer, performing work or standing by, but not including off-duty periods which are provided pursuant to the 

employment agreement); or 

(4) if such employee is employed in agriculture, not less than 

the minimum wage rate in effect under paragraph (1) after December 31, 1977. 

(b) Every employer shall pay to each of his employees (other than 

an employee to whom subsection (a)(5) applies) who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in 

the production of goods for commerce, and who in such workweek 

is brought within the purview of this section by the amendments 

made to this Act by the Fair Labor Standards Amendments of 

1966, title IX of the Education Amendments of 1972, or the Fair 

Labor Standards Amendments of 1974, wages at the following rate: 

Effective after December 31, 1977, not less than the minimum 

wage rate in effect under subsection (a)(1). 

(d)(1) No employer having employees subject to any provisions of 

this section shall discriminate, within any establishment in which 

such employees are employed, between employees on the basis of 

sex by paying wages to employees in such establishment at a rate 

less than the rate at which he pays wages to employees of the opposite sex in such establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, 

and which are performed under similar working conditions, except 

where such payment is made pursuant to (i) a seniority system; (ii) 

a merit system; (iii) a system which measures earnings by quantity 

or quality or production; or (iv) a differential based on any other 


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factor other than sex: Provided, That an employer who is paying 

a wage rate differential in violation of this subsection shall not, in 

order to comply with the provisions of this subsection, reduce the 

wage rate of any employee. 

(2) No labor organization, or its agents, representing employees 

of an employer having employees subject to any provisions of this 

section shall cause or attempt to cause such an employer to discriminate against an employee in violation of paragraph (1) of this 

subsection. 

(3) For purposes of administration and enforcement, any 

amounts owing to any employees which have been withheld in violation of this subsection shall be deemed to be unpaid minimum 

wages or unpaid overtime-compensation under this Act. 

(4) As used in this subsection, the term ‘‘labor organization’’ 

means any organization of any kind, or any agency or employee 

representation committee or plan, in which employees participate 

and which exists for the purpose, in whole or in part, of dealing 

with employers concerning grievances, labor disputes, wages, rates 

of pay, hours of employment, or conditions of work. 

(e)(1) Notwithstanding the provisions of section 13 of this Act (except subsections (a)(1) and (f) thereof), every employer providing 

any contract services (other than linen supply services) under a 

contract with the United States or any subcontract thereunder 

shall pay to each of his employees whose rate of pay is not governed by the Service Contract Act of 1965 (41 U.S.C. 351–357) or 

to whom subsection (a)(1) of this section is not applicable, wages 

at rates not less than the rates provided for in subsection (b) of this 

section. 

(2) Notwithstanding the provisions of section 13 of this Act (except subsections (a)(1) and (f) thereof) and the provisions of the 

Service Contract Act of 1965, every employer in an establishment 

providing linen supply services to the United States under a contract with the United States or any subcontract thereunder shall 

pay to each of his employees in such establishment wages at rates 

not less than those prescribed in subsection (b), except that if more 

than 50 per centum of the gross annual dollar volume of sales 

made or business done by such establishment is derived from providing such linen supply services under any such contracts or subcontracts, such employer shall pay to each of his employees in such 

establishment wages at rates not less than those prescribed in subsection (a)(1) of this section. 

(f) Any employee— 

(1) who in any workweek is employed in domestic service in 

a household shall be paid wages at a rate not less than the 

wage rate in effect under section 6(b) unless such employee’s 

compensation for such service would not because of section 

209(a)(6) of the Social Security Act constitute wages for the 

purpose of title II of such Act, or 

(2) who in any workweek— 

(A) is employed in domestic service in one or more 

households, and 

(B) is so employed for more than 8 hours in the aggregate, 

shall be paid wages for such employment in such workweek at 

a rate not less than the wage rate in effect under section 6(b). 


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(g)(1) In lieu of the rate prescribed by subsection (a)(1), any employer may pay any employee of such employer, during the first 90 

consecutive calendar days after such employee is initially employed 

by such employer, øa wage which is not less than $4.25 an hour.¿ 

a wage at a rate that is not less than— 

(A) for the 1-year period beginning on the effective date under section 7 of the Raise the Wage Act, $5.50 an hour; 

(B) for each succeeding 1-year period until the hourly wage 

under this paragraph equals the wage in effect under section 

6(a)(1) for such period, an hourly wage equal to the amount determined under this paragraph for the preceding year, increased by the lesser of— (i) $1.25; or 

(ii) the amount necessary for the wage in effect under this 

paragraph to equal the wage in effect under section 6(a)(1) 

for such period, rounded up to the nearest multiple of 

$0.05; and 

(C) for each succeeding 1-year period after the increase made 

pursuant to subparagraph (B)(ii), the minimum wage in effect 

under section 6(a)(1). 

(2) In lieu of the rate prescribed by subsection (a)(1), the Governor of Puerto Rico, subject to the approval of the Financial Oversight and Management Board established pursuant to section 101 

of the Puerto Rico Oversight, Management, and Economic Stability 

Act, may designate a time period not to exceed four years during 

which employers in Puerto Rico may pay employees who are initially employed after the date of enactment of such Act a wage 

which is not less than the wage described in paragraph (1). Notwithstanding the time period designated, such wage shall not continue in effect after such Board terminates in accordance with section 209 of such Act. 

(3) No employer may take any action to displace employees (including partial displacements such as reduction in hours, wages, or 

employment benefits) for purposes of hiring individuals at the wage 

authorized in paragraph (1) or (2). 

(4) Any employer who violates this subsection shall be considered 

to have violated section 15(a)(3) (29 U.S.C. 215(a)(3)). 

(5) This subsection shall only apply to an employee who has not 

attained the age of 20 years, except in the case of the wage applicable in Puerto Rico, 25 years, until such time as the Board described 

in paragraph (2) terminates in accordance with section 209 of the 

Act described in such paragraph. 

øSection 4(a) of H.R. 582 (as reported) provides for an amendment 

to section 6(g)(1) of the Fair Labor Standards Act of 1938, which 

is shown above. Subsection (b)(1) of section 4 of H.R. 582 (as reported) also provides for an amendment to repeal subsection (g) of 

section 6 (as amended by subsection (a) of such section 4). Paragraph (3) of section 4(b) of H.R. 582 (as reported) provides: ‘‘The 

repeal and amendment made by paragraphs (1) and (2), respectively, shall take effect on the date that is one day after the date 

on which the hourly wage under subparagraph (C) of section 6(g)(1) 

of the Fair Labor Standards Act of 1938 (29 U.S.C. 206(g)(1)), as 

amended by subsection (a), takes effect.’’. The following version of 

subsection (g) reflects the amendments made to it by subsections 

(a) and (b)(1) of section 4 of H.R. 582.¿ 


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ø(g)(1) In lieu of the rate prescribed by subsection (a)(1), any employer may pay any employee of such employer, during the first 90 

consecutive calendar days after such employee is initially employed 

by such employer, a wage at a rate that is not less than— 

ø(A) for the 1-year period beginning on the effective date under section 7 of the Raise the Wage Act, $5.50 an hour; 

ø(B) for each succeeding 1-year period until the hourly wage 

under this paragraph equals the wage in effect under section 

6(a)(1) for such period, an hourly wage equal to the amount determined under this paragraph for the preceding year, increased by the lesser of— 

ø(i) $1.25; or 

ø(ii) the amount necessary for the wage in effect under 

this paragraph to equal the wage in effect under section 

6(a)(1) for such period, rounded up to the nearest multiple 

of $0.05; and 

ø(C) for each succeeding 1-year period after the increase 

made pursuant to subparagraph (B)(ii), the minimum wage in 

effect under section 6(a)(1). 

ø(2) In lieu of the rate prescribed by subsection (a)(1), the Governor of Puerto Rico, subject to the approval of the Financial Oversight and Management Board established pursuant to section 101 

of the Puerto Rico Oversight, Management, and Economic Stability 

Act, may designate a time period not to exceed four years during 

which employers in Puerto Rico may pay employees who are initially employed after the date of enactment of such Act a wage 

which is not less than the wage described in paragraph (1). Notwithstanding the time period designated, such wage shall not continue in effect after such Board terminates in accordance with section 209 of such Act. 

ø(3) No employer may take any action to displace employees (including partial displacements such as reduction in hours, wages, or 

employment benefits) for purposes of hiring individuals at the wage 

authorized in paragraph (1) or (2). 

ø(4) Any employer who violates this subsection shall be considered to have violated section 15(a)(3) (29 U.S.C. 215(a)(3)). 

ø(5) This subsection shall only apply to an employee who has not 

attained the age of 20 years, except in the case of the wage applicable in Puerto Rico, 25 years, until such time as the Board described 

in paragraph (2) terminates in accordance with section 209 of the 

Act described in such paragraph.¿ 

(h)(1) Not later than each date that is 90 days before a new minimum wage determined under subsection (a)(1)(G) is to take effect, 

the Secretary shall determine the minimum wage to be in effect 

under this subsection for each period described in subsection 

(a)(1)(G). The wage determined under this subsection for a year 

shall be— 

(A) not less than the amount in effect under subsection (a)(1) 

on the date of such determination; 

(B) increased from such amount by the annual percentage increase, if any, in the median hourly wage of all employees as 

determined by the Bureau of Labor Statistics; and 

(C) rounded up to the nearest multiple of $0.05. 

(2) In calculating the annual percentage increase in the median 

hourly wage of all employees for purposes of paragraph (1)(B), the 


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Secretary, through the Bureau of Labor Statistics, shall compile 

data on the hourly wages of all employees to determine such a median hourly wage and compare such median hourly wage for the 

most recent year for which data are available with the median 

hourly wage determined for the preceding year. 

(i) Not later than 60 days prior to the effective date of any increase in the required wage determined under subsection (a)(1) or 

subparagraph (B) or (C) of subsection (g)(1), or in accordance with 

subclause (II) or (III) of section 3(m)(2)(A)(i) or section 14(c)(1)(A), 

the Secretary shall publish in the Federal Register and on the 

website of the Department of Labor a notice announcing each increase in such required wage. 

øSection 5 of H.R. 582 (as reported) provides for an amendment to 

add a new subsection (i) at the end of section 6 of the Fair Labor 

Standards Act of 1938, which is shown above. Sections 3(c)(2), 

4(b)(2), and 6(b)(1) of H.R. 582 (as reported) also provide for 

amendments to section 6(i). For the delayed effective dates to these 

amendments, see sections 3(c)(3), 4(b)(3), and 6(b)(2) of H.R. 582 

(as reported). The following version of subsection (i) reflects all 

amendments by sections 3(c)(2), 4(b)(2), 5, and 6(b)(1) of H.R. 582.¿ 

(i) Not later than 60 days prior to the effective date of any increase in the required wage determined under subsection (a)(1) øor 

subparagraph (B) or (C) of subsection (g)(1), or in accordance with 

subclause (II) or (III) of section 3(m)(2)(A)(i) or section 14(c)(1)(A),¿ 

the Secretary shall publish in the Federal Register and on the 

website of the Department of Labor a notice announcing each increase in such required wage. 

* * * * * * * 

LEARNERS, APPRENTICES, STUDENTS, AND HANDICAPPED WORKERS

SEC. 14. (a) The Secretary, to the extent necessary in order to 

prevent curtailment of opportunities for employment, shall by regulations or by orders provide for the employment of learners, of apprentices, and messengers employed primarily in delivering letters 

and messages, under special certificates issued pursuant to regulations of the Secretary, at such wages lower than the minimum 

wage applicable under section 6 and subject to such limitations as 

to time, number, proportion, and length of service as the Secretary 

shall prescribe. 

(b)(1)(A) The Secretary, to the extent necessary in order to prevent curtailment of opportunities for employment, shall by special 

certificate issued under a regulation or order provide, in accordance 

with subparagraph (B), for the employment, at a wage rate not less 

than 85 per centum of the otherwise applicable wage rate in effect 

under section 6 or not less than $1.60 an hour, whichever is the 

higher, of full-time students (regardless of age but in compliance 

with applicable child labor laws) in retail or service establishments. 

(B) Except as provided in paragraph (4)(B), during any month in 

which full-time students are to be employed in any retail or service 

establishment under certificates issued under this subsection the 

proportion of student hours of employment to the total hours of employment of all employees in such establishment may not exceed— 

(i) in the case of a retail or service establishment whose employees (other than employees engaged in commerce or in the 


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production of goods for commerce) were covered by this Act before the effective date of the Fair Labor Standards Amendments of 1974— 

(I) the proportion of student hours of employment to the 

total hours of employment of all employees in such establishment for the corresponding month of the immediately 

preceding twelve-month period, 

(II) the maximum proportion for any corresponding 

month of student hours of employment to the total hours 

of employment of all employees in such establishment applicable to the issuance of certificates under this section at 

any time before the effective date of the Fair Labor Standards Amendments of 1974 for the employment of students 

by such employer, or 

(III) a proportion equal to one-tenth of the total hours of 

employment of all employees in such establishment, 

whichever is greater; 

(ii) in the case of retail or service establishment whose employees (other than employees engaged in commerce or in the 

production of goods for commerce) are covered for the first time 

on or after the effective date of the Fair Labor Standards 

Amendments of 1974— 

(I) the proportion of hours of employment of students in 

such establishment to the total hours of employment of all 

employees in such establishment for the corresponding 

month of the twelve-month period immediately prior to the 

effective date of such Amendments, 

(II) the proportion of student hours of employment to the 

total hours of employment of all employees in such establishment for the corresponding month of immediately preceding twelve-month period, or 

(III) a proportion equal to one-tenth of the total hours of 

employment of all employees in such establishment, 

whichever is greater; or 

(iii) in the case of a retail or service establishment for which 

records of student hours worked are not available, the proportion of students hours of employment to the total hours of employment of all employees based on the practice during the immediately preceding twelve-month period in (I) similar establishments of the same employer in the same general metropolitan area in which such establishment is located, (II) similar establishments of the same or nearby communities if such establishment is not in a metropolitan area, or (III) other establishments of the same general character operating in the community or the nearest comparable community. 

For purpose of clauses (i), (ii), and (iii) of this subparagraph, the 

term ‘‘student hours of employment’’ means hours during which 

students are employed in a retail or service establishment under 

certificates issued under this subsection. 

(2) The Secretary, to the extent necessary in order to prevent 

curtailment of opportunities for employment, shall by special certificate issued under a regulation or order provide for the employment, at a wage rate not less than 85 per centum of the wage rate 

in effect under section 6(a)(5) or not less than $1.30 an hour, 

whichever is the higher, of full-time students (regardless of age but 


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in compliance with applicable child labor laws) in any occupation 

in agriculture. 

(3) The Secretary, to the extent necessary in order to prevent 

curtailment of opportunities for employment, shall by special certificate issued under a regulation or order provide for the employment by an institution of higher education, at a wage rate not less 

than 85 per centum of the otherwise applicable wage rate in effect 

under section 6 or not less than $1.60 an hour, whichever is the 

higher, of full-time students (regardless of age but in compliance 

with applicable child labor laws) who are enrolled in such institution. The Secretary shall by regulation prescribe standards and requirements to insure that this paragraph will not create a substantial probability of reducing the full-time employment opportunities 

of persons other than those to whom the minimum wage rate authorized by this paragraph is applicable. 

(4)(A) A special certificate issued under paragraph (1), (2), or (3) 

shall provide that the student or students for whom it is issued 

shall, except during vacation periods, be employed on a part-time 

basis and not in excess of twenty hours in any workweek. 

(B) If the issuance of a special certificate under paragraph (1) or 

(2) for an employer will cause the number of students employed by 

such employer under special certificates issued under this subsection to exceed six, the Secretary may not issue such a special 

certificate for the employment of a student by such employer unless 

the Secretary finds employment of such student will not a create 

a substantial probability of reducing the full-time employment opportunities of persons other than those employed under special certificates issued under this subsection. If the issuance of a special 

certificate under paragraph (1) or (2) for an employer will not cause 

the number of students employed by such employer under special 

certificates issued under this subsection to exceed six— 

(i) the Secretary may issue a special certificate under paragraph (1) or (2) for the employment of a student by such employer if such employer certifies to the Secretary that the employment of such student will not reduce the full-time employment opportunities of persons other than those employed under 

special certificates issued under this subsection, and 

(ii) in the case of an employer which is a retail or service establishment, subparagraph (B) of paragraph (1) shall not apply 

with respect to the issuance of special certificates for such employer under such paragraph. 

The requirement of this subparagraph shall not apply in the case 

of the issuance of special certificates under paragraph (3) for the 

employment of full-time students by institutions of higher education; except that if the Secretary determines that an institution 

of higher education is employing students under certificates issued 

under paragraph (3) but in violation of the requirements of that 

paragraph or of regulations issued thereunder, the requirements of 

this subparagraph shall apply with respect to the issuance of special certificates under paragraph (3) for the employment of students by such institution. 

(C) No special certificate may be issued under this subsection unless the employer for whom the certificate is to be issued provides 

evidence satisfactory to the Secretary of the student status of the 

employees to be employed under such special certificate. 


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(D) To minimize paperwork for, and to encourage, small businesses to employ students under special certificates issued under 

paragraphs (1) and (2), the Secretary shall, by regulation or order, 

prescribe a simplified application form to be used by employers in 

applying for such a certificate for the employment of not more than 

six full-time students. Such an application shall require only— 

(i) a listing of the name, address, and business of the applicant employer, 

(ii) a listing of the date the applicant began business, and 

(iii) the certification that the employment of such full-time 

students will not reduce the full-time employment opportunities of persons other than persons employed under special certificates. 

(c)(1) The Secretary, to the extent necessary to prevent curtailment of opportunities for employment, shall by regulation or order 

provide for the employment, under special certificates, of individuals (including individuals employed in agriculture) whose earning 

or productive capacity is impaired by age, physical or mental deficiency, or injury, at wages which are— 

ø(A) lower than the minimum wage applicable under section 

6,¿ 

(A) at a rate that equals, or exceeds, for each year, the greater 

of— (i)(I) $4.25 an hour, beginning 1 year after the date the 

wage rate specified in section 6(a)(1)(A) takes effect; (II) $6.40 an hour, beginning 2 years after such date; 

(III) $8.55 an hour, beginning 3 years after such date; 

(IV) $10.70 an hour, beginning 4 years after such date; 

(V) $12.85 an hour, beginning 5 years after such date; 

and 

(VI) the wage rate in effect under section 6(a)(1), on the 

date that is 6 years after the date the wage specified in section 6(a)(1)(A) takes effect; or 

(ii) if applicable, the wage rate in effect on the day before 

the date of enactment of the Raise the Wage Act for the employment, under a special certificate issued under this 

paragraph, of the individual for whom the wage rate is 

being determined under this subparagraph, 

(B) commensurate with those paid to nonhandicapped workers, employed in the vicinity in which the individuals under 

the certificates are employed, for essentially the same type, 

quality, and quantity of work, and 

(C) related to the individual’s productivity. 

(2) The Secretary shall not issue a certificate under paragraph 

(1) unless the employer provides written assurances to the Secretary that— 

(A) in the case of individuals paid on an hourly rate basis, 

wages paid in accordance with paragraph (1) will be reviewed 

by the employer at periodic intervals at least once every 6 

months, and 

(B) wages paid in accordance with paragraph (1) will be adjusted by the employer at periodic intervals, at least once each 

year, to reflect changes in the prevailing wage paid to experienced nonhandicapped individuals employed in the locality for 

essentially the same type of work. 


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(3) Notwithstanding paragraph (1), no employer shall be permitted to reduce the hourly wage rate prescribed by certificate 

under this subsection in effect on June 1, 1986, of any handicapped 

individual for a period of two years from such date without prior 

authorization of the Secretary. 

(4) Nothing in this subsection shall be construed to prohibit an 

employer from maintaining or establishing work activities centers 

to provide therapeutic activities for handicapped clients. 

(5)(A) Notwithstanding any other provision of this subsection, 

any employee receiving a special minimum wage at a rate specified 

pursuant to this subsection or the parent or guardian of such an 

employee may petition the Secretary to obtain a review of such special minimum wage rate. An employee or the employee’s parent or 

guardian may file such a petition for and in behalf of the employee 

or in behalf of the employee and other employees similarly situated. No employee may be a party to any such action unless the 

employee or the employee’s parent or guardian gives consent in 

writing to become such a party and such consent is filed with the 

Secretary. 

(B) Upon receipt of a petition filed in accordance with subparagraph (A), the Secretary within 10 days shall assign the petition 

to an administrative law judge appointed pursuant to section 3105 

of title 5, United States Code. The administrative law judge shall 

conduct a hearing on the record in accordance with section 554 of 

title 5, United States Code, with respect to such petition within 30 

days after assignment. 

(C) In any such proceeding, the employer shall have the burden 

of demonstrating that the special minimum wage rate is justified 

as necessary in order to prevent curtailment of opportunities for 

employment. 

(D) In determining whether any special minimum wage rate is 

justified pursuant to subparagraph (C), the administrative law 

judge shall consider— 

(i) the productivity of the employee or employees identified 

in the petition and the conditions under which such productivity was measured; and 

(ii) the productivity of other employees performing work of 

essentially the same type and quality for other employers in 

the same vicinity. 

(E) The administrative law judge shall issue a decision within 30 

days after the hearing provided for in subparagraph (B). Such action shall be deemed to be a final agency action unless within 30 

days the Secretary grants a request to review the decision of the 

administrative law judge. Either the petitioner or the employer 

may request review by the Secretary within 15 days of the date of 

issuance of the decision by the administrative law judge. 

(F) The Secretary, within 30 days after receiving a request for review, shall review the record and either adopt the decision of the 

administrative law judge or issue exceptions. The decision of the 

administrative law judge, together with any exceptions, shall be 

deemed to be a final agency action. 

(G) A final agency action shall be subject to judicial review pursuant to chapter 7 of title 5, United States Code. An action seeking 

such review shall be brought within 30 days of a final agency action described in subparagraph (F). 


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(6) PROHIBITION ON NEW SPECIAL CERTIFICATES.—Notwithstanding paragraph (1), the Secretary shall not issue a special 

certificate under this subsection to an employer that was not 

issued a special certificate under this subsection before the date 

of enactment of the Raise the Wage Act. 

(7) SUNSET.—Beginning on the day after the date on which 

the wage rate described in paragraph (1)(A)(i)(VI) takes effect, 

the authority to issue special certificates under paragraph (1) 

shall expire, and no special certificates issued under paragraph 

(1) shall have any legal effect. 

(8) TRANSITION ASSISTANCE.—Upon request, the Secretary 

shall provide— 

(A) technical assistance and information to employers 

issued a special certificate under this subsection for the 

purposes of— 

(i) transitioning the practices of such employers to 

comply with this subsection, as amended by the Raise 

the Wage Act; and 

(ii) ensuring continuing employment opportunities 

for individuals with disabilities receiving a special 

minimum wage rate under this subsection; and 

(B) information to individuals employed at a special minimum wage rate under this subsection, which may include 

referrals to Federal or State entities with expertise in competitive integrated employment. 

(d) The Secretary may by regulation or order provide that sections 6 and 7 shall not apply with respect to the employment by 

any elementary or secondary school of its students if such employment constitutes as determined under regulations prescribed by 

the Secretary, an integral part of the regular education program 

provided by such school and such employment is in accordance 

with applicable child labor laws. 

* * * * * * * 


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(78) 

MINORITY VIEWS 

INTRODUCTION

In recent years, the far-left has begun to call for socialist policies 

like free college and universal health care and now Committee 

Democrats are jumping on board by considering H.R. 582, legislation to hike the federal minimum wage from $7.25 to $15 an hour. 

Instead of providing tangible benefits to working class Americans, 

a bill to increase the federal minimum wage by 107 percent would 

cause the most harm to the very people its supporters claim to benefit. Studies cited below, including from the Congressional Budget 

Office (CBO), show significant job losses resulting from such an increase. Lesser-skilled workers in entry-level jobs, Americans without a GED, and tipped employees would bear the brunt of job 

losses caused by the mandate. Committee Republicans know that 

instead of reducing poverty, a radical, one-size-fits-all minimum 

wage hike would redistribute poverty. 

Such a radical minimum wage hike would not happen in a vacuum and would have a number of severely negative consequences. 

Mandating a $15 federal minimum wage would harm students, as 

it would have a negative impact on youth employment as most 

workers paid the minimum wage are below the age of 25. These are 

individuals at the start of their careers or filling part-time or summer jobs, and raising the minimum wage to $15 an hour puts these 

types of jobs at risk of being eliminated altogether. 

More than doubling the current federal minimum wage would 

harm businesses, especially small and local businesses, and the 

economy. This kind of unprecedented, one-size-fits-all mandate 

would force many job creators to reduce workers’ hours, let employees go, or close their doors for good. The development would also 

lead to accelerated workplace automation, something that many 

Democrats oppose. 

Currently, wages are on the rise thanks to a booming economy, 

the Republican Tax Cuts and Jobs Act, and elimination of unnecessary regulations. With more than 7 million unfilled jobs nationwide, job creators know they must offer competitive wages and benefits to attract and retain workers. Congress should be cautious 

when considering a policy that would interfere with this positive 

momentum for workers. For these reasons, and as set forth more 

fully below, Committee Republicans are united in their opposition 

to H.R. 582. 

NEGATIVE CONSEQUENCES OF H.R. 582 

Committee Republicans are justifiably concerned about many severely negative consequences of the bill for workers, students, 

small businesses, and the economy, including the following: 


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1 CBO, The Effects of a Minimum-Wage Increase on Employment and Family Income 23 n.8 

(Feb. 2014). 2 Empl. Policies Inst., The Impact of a $15 Minimum Wage 2 (Jan. 2019), https:// 

www.epionline.org/wp-content/uploads/2019/01/EPI_NationalMWDocument.pdf. 3 CBO, supra note 1, at 4 n.6. 4Gradually Raising the Minimum Wage to $15: Good for Workers, Good for Businesses, and 

Good for the Economy: Hearing Before the H. Comm. on Educ. and Labor, 116th Cong. (2019) 

(statement of Douglas Holtz-Eakin, President, American Action Forum, at 4). 5 Id. (statement of Michael R. Strain, Ph.D., Director of Economic Policy Studies, American 

Enterprise Institute, at 4–5). 

H.R. 582 IMPOSES A RADICAL AND UNPRECEDENTED MINIMUM WAGE

HIKE

Imposing a 107 percent increase in the federal minimum wage to $15 would be a historically radical and unprecedented mandate. 

The last increase in the federal minimum wage was 41 percent, but 

prior increases were ‘‘typically lower.’’ 1 In the federal minimum 

wage’s history, it has been an average of $7.40 in today’s dollars, 

slightly above the current wage rate of $7.25 per hour.2 If the minimum wage had been indexed to inflation in 2010, it would have 

been $8.35 in 2018, based on the Bureau of Labor Statistics’ consumer price index. According to CBO, the federal minimum wage 

reached its peak in 1968, when its value in 2013 dollars was $8.41 

if the conversion is done with the price index for personal consumption expenditures published by the U.S. Bureau of Economic Analysis, which is the index CBO favors.3

Dr. Douglas Holtz-Eakin, former director of CBO, described in 

his testimony the magnitude of the minimum wage hike proposed 

in H.R. 582: 

The federal government has never implemented a minimum wage hike of this magnitude and only a few cities 

are beginning to implement $15 per hour minimum wages. 

It cannot be understated, however, that a minimum wage 

increase this large (over 100 percent) poses a major disruption to the U.S. labor market. Unfortunately, the low-wage 

workers the policy is intended to help would be the very 

ones who would most suffer these consequences.4

Dr. Michael R. Strain, Director of Economic Policy Studies at the 

American Enterprise Institute, stated in his testimony that a 107 

percent increase to the federal minimum wage would be an unprecedented change in policy: 

A $15 minimum wage is outside both the national and 

international evidence base. . . . A $15 per hour federal 

minimum wage is a large and risky gamble, and is outside 

our evidence base, because it is such a high minimum 

wage relative to the existing distribution of wage 

rates. . . . [A] $15 per hour federal minimum wage is not 

a modest policy change. It is a very large policy change. It 

will impact a very large share of the labor market. Such 

a large increase in the minimum wage would send labor 

market policy into uncharted waters, and would risk 

harming the very groups of workers and individuals the 

policy is designed to help.5

A survey of 197 U.S. economists conducted in February 2019 found that 84 percent believe a $15 federal minimum wage would 


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6Lloyd Corder, Corcom, Inc., Carnegie Mellon Univ., Survey of US Economists on a $15 Federal Minimum Wage 4 (Mar. 2019), https://www.epionline.org/wp-content/uploads/2019/03/ 

EPI_Feb2019_MinWageSurvey-FINAL.pdf. 7 Alan B. Krueger, The Minimum Wage: How Much Is Too Much?, N.Y. TIMES, Oct. 9, 2015. 8 CBO, The Effects on Employment and Family Income of Increasing the Federal Minimum 

Wage (July 2019). 9 Id. at 12. 10 Id. at 14. 11 Id. at 3. 12 Id. at 2. 13See CBO, supra note 1. 14 Holtz-Eakin, supra note 4, at 4. 15Strain, supra note 5, at 4. 

have negative effects on youth employment, and 77 percent believe 

it would have a negative impact on jobs available.6 Even President 

Obama’s former Chairman of Economic Advisers argued in October 

2015 that raising the minimum wage to $15 would ‘‘put us in uncharted waters, and risk undesirable and unintended consequences.’’ 7

H.R. 582 WOULD CAUSE EXTENSIVE JOB LOSSES

Raising the federal minimum wage to $15 would cause extensive 

and disruptive job losses and harm entry-level workers in many regions around the country. In a comprehensive report issued in July 

2019, CBO estimates that up to 3.7 million jobs would be lost from 

a minimum wage increase to $15, with a median impact of 1.3 million workers becoming jobless because of the wage hike.8 Even 

under the estimated median impact, 7 percent of workers directly 

affected by the minimum wage hike would lose their jobs.9 Significantly, of those losing their jobs, 60 percent would be female workers, 46 percent would be young workers, and 38 percent would 

have less than a high school diploma.10

CBO also estimates that a $15 federal minimum wage would lift 

1.3 million individuals out of poverty.11 Therefore, H.R. 582 would 

cause at least one job to be lost for every person who moved out 

of poverty, and in the worst-case scenario estimated by CBO, as 

many as three jobs would be lost for every individual moving out 

of poverty. As such, H.R. 582 creates a very ill-advised and undesirable trade off. 

In addition, CBO found that there would be a net reduction in 

family income of $9 billion resulting from a $15 minimum wage— 

in other words, the so-called raise mandated by H.R. 582 will reduce pay for many American families.12 Overall, the recent CBO 

study demonstrates that the unprecedented, one-size-fits-all wage 

hike dictated in H.R. 582 would hurt workers and small businesses, and force many job creators to cope by reducing workers’ 

hours, eliminating workers’ jobs, increasing automation, or closing 

their doors for good. 

Furthermore, Dr. Holtz-Eakin, using the methodology from 

CBO’s 2014 minimum wage report,13 estimated that increasing the federal minimum wage to $15 by 2024 would result in a loss of 9.6 

million jobs, nearly as much as the 10.2 million jobs added to the 

U.S. economy since the end of 2014.14 Dr. Strain’s testimony 

agreed regarding the negative effects on employment: ‘‘I expect that 

raising the federal minimum wage to $15 per hour would significantly reduce employment among lower-skilled workers and lessexperienced workers.’’15


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16 U.S. Dep’t of Lab., Bureau of Lab. Stat., Characteristics of Minimum Wage Workers, 2017 

(Mar. 2018). 17 Empl. Policies Inst., supra note 2, at 3. 18Strain, supra note 5, at 7. 19 Holtz-Eakin, supra note 4, at 4, 7. 

H.R. 582 WOULD HARM ENTRY-LEVEL WORKERS AND STUDENTS

Minimum wage workers tend to be young. In 2017, while workers under 25 were only about one-fifth of all hourly paid workers, 

they were about half of those paid the minimum wage or less. 

While workers 21 and under were only 11.1 percent of all hourly 

workers, 36 percent were paid the minimum wage or less.16 However, entry-level workers do not continue earning the minimum 

wage for long. Approximately two-thirds of minimum wage workers 

who remain in the workforce receive a raise within one year.17 Dr. 

Strain noted in his testimony the importance of the first job for 

younger workers as they move up the economic ladder: ‘‘Young 

workers need to get their start in the labor market, using their 

first jobs to learn and gain valuable experience.’’ 18

As mentioned above, a survey of 197 economists found that 84 percent believe raising the federal minimum wage to $15 will harm 

youth employment. Dr. Holtz-Eakin’s testimony referred to a comprehensive review of 100 minimum wage studies, which found that 

two-thirds of the studies ‘‘indicate that increasing the minimum 

wage negatively effects employment, especially among low-skill 

workers.’’ Later research shows that minimum wage increases 

‘‘harm low-income workers in a variety of other ways, such as job 

loss, slowdown in hiring, increasing prices, firms replacing lowskilled workers with more productive workers, and firms shutting 

down all together.’’ For example, Jeffrey Clemens and Michael 

Wither found in 2014 that the last time Congress increased the 

minimum wage, job losses among workers earning less than $7.50 

were ‘‘so severe that their earnings, on net, declined. . . . 

[E]mployment in this group fell by 8 percent, translating to about 

1.7 million jobs.’’ Further, ‘‘net average monthly incomes for lowwage workers [fell] by $100 during the first year after the minimum wage increase and by an additional $50 in the following two 

years.’’ 19

Seattle’s experience with a $15 minimum wage has confirmed 

that it will hurt lower-wage workers, as Dr. Holtz-Eakin explained: 

[I]ndependent research on Seattle’s $15 per hour minimum wage demonstrates that the new law has been destructive for the city’s low-wage workers. University of 

Washington (UW) researchers—hired by the Seattle City 

Council to analyze the new law—found that the minimum 

wage increase caused 6.8 percent of low-wage workers to 

lose their jobs, meaning that 10,000 workers in Seattle 

have lost their jobs. . . . Evidence also indicates that in 

addition to costing 10,000 low-wage workers their jobs, Seattle’s $15 per hour minimum wage caused work hours 

among low-wage workers to fall by so much that their 

monthly earnings declined. In particular, the 2017 UW 

study concluded that Seattle’s minimum wage increase 

boosted the average wage rate among low-wage workers by 


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20 Id. at 6. 

21 Jeffrey Clemens et al., The Minimum Wage, Fringe Benefits, and Worker Welfare, NAT’L BU- REAU OF ECON. RESEARCH, Working Paper 24635 (May 2018). 22Strain, supra note 5, at 5–6. 23 29 U.S.C. 203(m)(2); 29 C.F.R. 531.59. Tipped employees are those who customarily receive 

more than $30 per month in tips. 29 U.S.C. 203(t). 24 EMPL. POLICIES INST., supra note 2, at 3. 25 Id. 26 Id. 

just 3.1 percent or $0.44 per hour. Unfortunately, this 

modest wage increase was entirely offset by declines in 

work hours. The UW researchers find that Seattle’s minimum wage law has caused low-wage work hours to decline by 9.4 percent. Consequently, even among the lowwage workers who are still employed and earn slightly 

higher wages, their average monthly earnings, on net, declined by $125 per month because they lost so many work 

hours. When combining the lost work hours with the 

10,000 lost jobs, the 2017 UW study concluded that Seattle’s $15 minimum wage law reduced total income paid 

to the city’s low-wage workers by $120 million per year.20

In addition, a $15 minimum wage can cause harm beyond job 

losses and reduced hours. A minimum wage increase can also reduce employer-provided benefits such as health insurance. A recent 

study found that state-level minimum wage increases decreased 

the likelihood of individuals reporting having employer-sponsored 

health insurance, with the largest effects among very low-paying 

occupations.21 Dr. Strain commented on additional negative consequences of a $15 minimum wage: 

A minimum wage increase of this magnitude is also imprudent because of the likelihood that such a large increase will create unintended consequences. . . . In my 

own research, my coauthors and I have found that minimum wage increases are associated with decreases in selfreported health outcomes among men, particularly among 

unemployed men.22

H.R. 582 WOULD HURT TIPPED WORKERS

Under the Fair Labor Standards Act (FLSA), tipped workers 

must be paid at least the federal minimum wage. However, the 

FLSA permits a business owner to utilize a tip credit toward its 

minimum wage obligation.23 If cash wages and tips do not meet the 

federal minimum wage, the business owner must make up the difference. 

Most tipped employees do not support eliminating the tip credit. 

They report earning over $14 per hour on average, with top earners 

receiving $24 or more.24 A survey of hundreds of restaurant employees found that 97 percent preferred the current system of a 

base wage and tips to a no-tip system.25 Moreover, Harvard Business School economists found a 14 percent increase in restaurant 

closures with each one-dollar increase in the base wage for tipped 

employees in the San Francisco Bay area.26 Dr. Holtz-Eakin discussed in his testimony how eliminating the tip credit, as some cities have done, could hurt employment: 


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27 Holtz-Eakin, supra note 4, at 6. 28Gradually Raising the Minimum Wage to $15: Good for Workers, Good for Businesses, and 

Good for the Economy: Hearing Before the H. Comm. on Educ. and Labor, 116th Cong. (2019) 

(statement of Simone Barron at 1). 

29 Id. at 2. 

Likely worsening the effect on job growth, a number of 

these cities boosted the ‘‘tipped’’ minimum wage by eliminating the tip credit. While intended to boost pay for 

tipped workers, eliminating the tip credit does not make 

the most vulnerable better off. . . . For the lowest earning 

tipped workers, eliminating the tip credit makes little difference in their take-home pay. Thus, removing the tip 

credit only places another burden on restaurant businesses 

without improving the livelihoods of low-income workers. 

This likely leads businesses to further cut hours, jobs, or 

hiring.27

Ms. Simone Barron, a tipped worker in the full-service restaurant industry in Seattle, testified about her experience with a 

$15 minimum wage and no tip credit. She first noted in her testimony the benefits of being a tipped worker: 

Control over my earnings is one of the biggest perks of 

working in the restaurant industry. The harder I work to 

show hospitality to my guests, the better my tip. That’s an 

average of 20 percent I make on each bill. The standard 

tipping model has a cost of living increase built into its 

structure,—too as the cost of goods goes up, so do menu 

prices and then so do tips. Contrary to the rhetoric of my 

industry’s critics, I’m not ‘‘forced’’ to rely on tips–I’ve been 

able to thrive on tips. Historically, in short four to six hour 

shifts, I can earn $25 to $50 an hour—enough to make a 

life for myself and my son.28

However, in response to a $15 minimum wage in Seattle and no 

tip credit in the state of Washington, Ms. Barron’s restaurant 

changed to a service-charge model with no tip line on the bill. As 

a result, Ms. Barron has seen a reduction in her take-home pay: 

‘‘The few dollars an hour increase in my minimum wage doesn’t 

cover the loss of income because of not receiving tips.’’ 29 She has 

had to take a second job to replace the lost income, her finances 

have become precarious, and her quality of life has been diminished: 

I used to work 4 shifts a week and made enough money 

to raise a son, pay my rent, go to school and be a part of 

a vibrant arts community. With the cost of living skyrocketing and the impact of the minimum wage increase 

on my income, I had to get a second job and work 6 days 

a week. I couldn’t sustain that pace. Now, I worry every 

month about paying my rent. This is a worry I have never 

had until the minimum wage increase impacted my job. I 

have had to give up my passion of acting, I no longer can 

take trips with my kid in the summers. My smaller income 


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30 Id. 31MichaeL J. Chow and Paul S. Bettencourt, NFIB Research Ctr., Economic Effects of Enacting the Raise the Wage Act on Small Businesses and the U.S. Economy 10 (Jan. 25, 2019). 32 Holtz-Eakin, supra note 4, at 4. 33 NFIB Nat’l Small Business Poll, Job Openings 1 (2017), http://411sbfacts.com/files/ 

NFIB_SBP_JobOpenings2017B_final.pdf. 34 Amelia Lucas, Higher minimum wage means restaurants raise prices and fewer employee 

hours, survey finds, CNBC, Apr. 11, 2019. The survey was conducted by Harri, a workplace 

management software company that works with restaurants. 

all goes to bills, all my time goes to picking up just one 

more shift.30

Ms. Barron’s story shows the real-world damage H.R. 582 will 

have on individuals across the nation. 

H.R. 582 WOULD THREATEN SMALL BUSINESSES AND THE ECONOMY

According to a January 2019 study done by the National Federation of Independent Business (NFIB), enacting H.R. 582 would over 

a 10-year period reduce U.S. private sector employment by over 1.6 

million jobs and result in a cumulative reduction in U.S. real output of over $2 trillion. Small businesses would be particularly hurt. 

Businesses with fewer than 500 employees would see 57 percent of 

private sector job losses—over 900,000 lost jobs; businesses with 

fewer than 100 employees would see about 43 percent of all jobs 

lost—nearly 700,000 jobs.31

Dr. Holtz-Eakin noted in his testimony that research has shown 

minimum wage hikes result in ‘‘a slowdown in hiring, increasing 

prices, . . . and firms shutting down altogether.’’ As previously 

discussed, Dr. Holtz-Eakin estimates a $15 federal minimum wage 

would result in a loss of 9.6 million jobs, which would nearly wipe 

out the 10.2 million jobs the U.S. economy has added since the end 

of 2014.32

In a survey of small businesses, 47 percent said a two-year phased-in $15 minimum wage would negatively impact their business. Of those reporting a negative impact, 85 percent anticipated 

they would have to increase the price of goods and services, passing 

on some of those price increases to consumers, and 74 percent said 

they would absorb wage increases through lower earnings. Fiftyeight percent anticipated using less expensive or part-time workers; 69 percent would not fill an open position; 63 percent would 

reduce employee hours; and 62 percent would reduce the number 

of employees working at their business.33

A recent survey of 173 restaurants representing more than 4,000 

restaurant locations ranging from fine dining to fast food found 

that 71 percent of operators responded to state and local minimum 

wage hikes by raising menu prices. In addition, 64 percent said 

they responded by reducing employee hours, and 43 percent said 

they eliminated jobs.34

H.R. 582 IS NOT AN EFFECTIVE ANTI-POVERTY POLICY

The $15 minimum wage will not alleviate poverty. In 2014, only 

35 percent of individuals living in households with incomes under 

the federal poverty line were employed at any time during the previous year. Conversely, most people who would be affected by a $15 

minimum wage are not poor. The average family income for affected individuals would be $56,982. Nearly half—48.4 percent of 


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35 Empl. Policies Inst., supra note 2, at 2. 36 Holtz-Eakin, supra note 4, at 6–7. 

those who would be affected by a $15 minimum wage—live in 

households with incomes over three times the federal poverty 

line.35

Dr. Holtz-Eakin elaborated on why a $15 minimum wage will not 

help those in poverty: 

Evidence on the federal and local level indicates that 

raising the minimum wage is an ineffective way to assist 

low-income workers. Hourly wages do not effectively identify economic well-being, as minimum wage workers are 

from families across the income distribution. While some 

minimum wage workers are in poverty, the vast majority 

are not. For instance, 80 percent of those who make the 

federal minimum wage of $7.25 per hour are not in poverty. Meanwhile, over one-third of minimum wage workers 

are young adults who still live with their parents. The incomes of those families average more than $100,000. Thus, 

raising the federal minimum wage to $15 per hour would 

result in significant job loss in order to provide minimal 

benefits to low-income workers. When examining the effect 

of raising the federal minimum wage to $15 per hour, the 

AAF–Manhattan Institute study found that only 6.7 percent of the net change in wage earnings would go to workers in poverty, according to the middle estimate. Twice as 

much, 14.7 percent, would go to workers with family incomes over six-times the poverty threshold. Consequently, 

at best, a $15 per hour minimum wage will only marginally help low-income workers.36

The previous points represent only a few of the predictable and 

extremely negative consequences of enacting H.R. 582. As noted in 

Dr. Strain’s testimony, because a 107 percent increase in the federal minimum wage is far outside the national and international 

evidence base, the potential unintended consequences of passing 

this legislation constitute a ‘‘large and risky gamble.’’ It is irresponsible for Congressional Democrats to foist a radical and unprecedented economic experiment on workers, businesses, and the American economy, and as such, H.R. 582 should be rejected. 

REPUBLICAN AMENDMENTS

H.R. 582 imposes a sudden and significant shift in labor costs 

that will be felt by students, workers, businesses, and the economy. 

During Committee consideration of H.R. 582, Republicans offered 

amendments in an attempt to protect Americans from the irresponsible policy espoused in this bill, to no avail. 

First, Representative Ben Cline (R–VA) focused on a key priority 

of Committee Republicans—American job growth. With our current 

growing economy and 7 million unfilled jobs nationwide, wages are 

rising as job creators understand the need to offer competitive 

wages and benefits in order to retain and attract workers. But with 

studies showing that a 107 percent increase in the federal minimum wage will result in the loss of 1.6 million jobs or even much 


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37MichaeL J. Chow and Paul S. Bettencourt, supra note 31. 38 U.S. Small Bus. Admin., 2018 Small Business Profile, https://www.sba.gov/sites/default/files/ 

advocacy/2018-Small-Business-Profiles-US.pdf. 39 U.S. Dep’t of Labor, supra note 16. 40 Editorial, L.A. labor leaders’ hypocrisy on minimum wage hike, L.A. Times, May 29, 2015. 

more, it would be egregiously irresponsible to enact this legislation 

without an ‘‘off ramp’’ to prevent the increase from phasing in if 

harmful economic conditions arise. With this understanding, Mr. 

Cline offered an amendment to ensure that the radical wage hikes 

mandated by H.R. 582 will not continue if jobs are being lost, an 

approach similar to provisions in state minimum wage laws, including those in high-minimum wage states such as California and 

New York. On a party line vote, this amendment was defeated, 

with all Committee Democrats opposed. 

Small businesses employ almost half of American workers and 

account for two-thirds of net new jobs. In an effort to protect those 

that drive local economies and are most vulnerable to a radical increase in the federal minimum wage, Representative Dan Meuser 

(R–PA) offered an amendment to shield the smallest of businesses 

from the sudden and extreme spike in labor costs mandated in this 

bill. A study by the NFIB estimated that 57 percent of job losses 

caused by this bill will come from small businesses,37 which make 

up 99.9 percent of all businesses in the United States.38 Despite 

these truths and the sensible support of this amendment by Representative Haley Stevens (D–MI), the amendment was disapproved by a vote of 24–21. 

Concerned with the bill’s negative impacts on students and 

young workers, Representative Rick Allen (R–GA) offered an 

amendment to protect youth employment by ensuring future wage 

hikes are halted if a significant number of young workers are unemployed. Almost half of workers paid at or below minimum wage 

are under the age of 25.39 A radical $15 minimum wage rate would 

create an insurmountable barrier to entry for young workers who 

generally possess fewer skills and less experience, and who rely on 

entry-level jobs to build critical competencies of personal responsibility, teamwork, conflict resolution, discipline, and accountability. 

Committee Democrats continued to demonstrate a lack of confidence in their proffered policy’s ability to benefit American workers by unanimously opposing this amendment. 

Because Committee Republicans believe all American workers 

deserve equal protection under the law, Representative Lloyd 

Smucker (R–PA) offered an amendment to prohibit any state or locality from adopting a minimum wage law that exempts employees 

covered by a collective bargaining agreement. In recent years, attempting to boost union organizing efforts, localities such as Los 

Angeles, San Francisco, San Jose, Oakland, Santa Monica, Long 

Beach, and the City of SeaTac, Washington, passed minimum wage 

laws which exempted workers covered by a collective bargaining 

agreement. The Los Angeles Times editorial board called this ‘‘hypocrisy at its worst.’’ 40 In a striking display of support for labor 

unions at the expense of a large majority of their constituents, 

Committee Democrats voted unanimously to defeat this amendment. 


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41 Amendment in the Nature of a Substitute to H.R. 582 Offered by Mr. Scott of Virginia 

§ 7(2). 

Concerned about the lack of transparency and fairness displayed 

by the Committee Majority in the consideration of this legislation, 

the Committee’s Republican Leader, Representative Virginia Foxx 

(R–NC), offered an amendment to strike the eleventh-hour provision in the chairman’s Amendment in the Nature of a Substitute 

which delays the effective date of the legislation for workers in the 

Commonwealth of the Northern Mariana Islands.41 In defense of 

this last-minute exemption, Representative Gregorio Kilili 

Camacho Sablan (D–MP) explained that lower average wages in 

the Northern Mariana Islands require a different approach to the 

minimum wage—an argument that also applies to many regions of 

the United States which are not afforded such consideration under 

this legislation. In support of this eleventh-hour special exemption, 

Committee Democrats voted unanimously to defeat this amendment. 

In recognition that H.R. 582’s sudden and extreme hikes in labor 

costs would cause workforce automation to surge forward at a faster rate, Representative Ron Wright (R–TX) offered an amendment 

to stall the bill’s damaging effects if the Government Accountability 

Office (GAO) finds the bill will cause more than 500,000 jobs to be 

lost due to automation. Committee Democrats, aside from Ms. Stevens, opposed the amendment, choosing to stand behind an ideological priority even if real American jobs are shown to be in peril. 

Finally, Representative Phil Roe (R–TN) offered an amendment 

to protect workers in rural communities around the country. The 

Roe amendment instructs GAO to study the effect of this legislation on regions of the country with lower costs of living, such as 

rural areas, and prevents the legislation from going into effect if 

GAO finds it will result in the loss of 200,000 or more jobs in these 

areas. By unanimously voting against this straightforward amendment, Committee Democrats demonstrated a lack of concern for the 

regional implications of this radical legislation which threatens 

millions of American jobs around the country. 

CONCLUSION

H.R. 582 would inflict a radical, unprecedented increase in the 

federal minimum wage. It would harm workers, businesses, and 

the economy while failing to provide benefits to the people the bill 

is purported to help. For these reasons, and those outlined above, 

Committee Republicans strongly oppose enactment of H.R. 582 as 

reported by the Committee on Education and Labor. 

VIRGINIA FOXX, 

Ranking Member. 

GLENN ‘‘GT’’ THOMPSON. 

BRETT GUTHRIE. 

GLENN GROTHMAN. 

RICK W. ALLEN. 

LLOYD SMUCKER. 

MARK WALKER. 

BEN CLINE. 

DAVID P. ROE, M.D. 


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TIM WALBERG. BRADLEY BYRNE. RUSS FULCHER. 

Æ 


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