The federal minimum wage was last increased two years ago Sunday, and advocates for low-wage workers are renewing their push for another increase as the presidential campaign heats up.
Tsedeye Gebreselassie, a staff attorney at the National Employment Law Project, said the real value of the minimum wage erodes over time, since it stays the same while the cost of living keeps rising. In turn, it has an adverse impact on the purchasing power of low-wage workers and therefore, slowed the economic recovery.
"If the minimum wage had kept pace with inflation over the last 40 years, it would actually be more than $10 today," said Gebreselassie.
During his 2008 presidential campaign, then-Senator Barack Obama proposed raising the minimum wage to $9.50 by 2011. The Economic Policy Institute said that would generate $60 billion of consumer spending over two years.
On the Republican side, at least two of the leading 2012 presidential candidates have signaled they would be willing to do away with the minimum wage. Michele Bachmann has suggested that the minimum wage is an example that there’s too much expansion of government, and Herman Cain said the policy is unnecessary because most companies pay higher than the minimum wage anyway.