Millions of workers—mostly women, and disproportionately women of color—struggle to support themselves and their families on poverty-level wages. Women are close to two-thirds of the workforce in jobs that pay the federal minimum wage of $7.25 per hour or just a few dollars above it. And women are more than two-thirds of tipped workers, for whom the federal minimum cash wage is just $2.13 per hour.
Women’s overrepresentation in low-wage jobs is one factor driving the persistent gender wage gap: overall, women working full time, year round typically are paid just 82 cents for every dollar paid to their male counterparts. This gap varies by race and is even wider for many women of color compared to their white, non-Hispanic male counterparts.
Raising the minimum wage—and ensuring that tipped workers receive the full minimum wage before tips—could both lift women and their families out of poverty and help close the gender wage gap. As passed by the House of Representatives in July 2019, the Raise the Wage Act (H.R. 582, S. 150) would increase the federal minimum wage from $7.25 to $15 per hour by 2025, then index it to keep pace with wages overall. The bill would also gradually raise the federal minimum cash wage for tipped workers until it is equal to the regular minimum wage and phase out unfair exemptions that have allowed employers to pay young workers and people with disabilities subminimum wages. Establishing one fair minimum wage is a key step toward equity, dignity, and safety for women at work.
Who Are Low-Wage Workers?
- Women—especially women of color. Women are nearly two-thirds of the workforce in jobs that typically pay $11.50 per hour or less and over two-thirds of tipped workers, and women of color are particularly overrepresented in these jobs. More than one in four working women—and 30 percent of working women of color—would get a raise if the minimum wage rose to $15 per hour by 2025.
- Adults. Over half of women earning the minimum wage are age 25 or older, and most do not have a spouse’s income to rely on. Nearly two in three workers who would get a raise under the Raise the Wage Act are at least 25 years old.
- Parents. Of the workers who would benefit from raising the minimum wage to $15 per hour, more than one-quarter have children. One in four working mothers—and 37 percent of working single mothers—would get a raise under the Raise the Wage Act.
Women working in low-wage jobs need a raise.
- Congress has raised the minimum wage just three times in the past 40 years, and enacted the last increase over a decade ago. A woman working full time at minimum wage earns only about $15,000 annually, more than $5,000 below the poverty line for a mother with two children.
- The federal minimum cash wage for tipped workers is $2.13 per hour, unchanged since 1991. Although employers are obligated to ensure that tipped employees receive at least the regular minimum wage by making up the difference when tips fall short, this requirement is difficult to enforce and many employers fail to comply. As a result, tipped workers often struggle to make ends meet on unpredictable tips without dependable income from a paycheck. Nearly one in six women tipped workers lives in poverty—more than double the rate for working women overall and more than triple the rate for working men overall.
- Poverty-level wages heighten women’s economic vulnerability, which in turn heightens their vulnerability to sexual harassment on the job. Women who rely on tips rather than wages for the bulk of their income often feel especially compelled to tolerate inappropriate behavior from customers, and women’s lack of economic power in these workplaces perpetuates the already pervasive culture of sexual harassment in industries that employ large numbers of tipped workers.
The Raise the Wage Act would boost wages for millions of working women—especially women of color—helping them provide for themselves and their families.
- The Economic Policy Institute (EPI) estimates that if the minimum wage reached $15 per hour by 2025, more than 33 million workers would get a raise—including over 10 million workers earning just above $15 per hour, who would see their pay increase due to the higher floor set by the new minimum wage. Of the total affected workers, 19.5 million (58 percent) are women.
- Black women and Latinas would especially benefit: 35 percent of Black working women and 32 percent of working Latinas would receive higher pay by 2025 under the Raise the Wage Act. One quarter of white, non-Hispanic working women would get a raise.
- Working mothers would also especially benefit: of the nearly 9.4 million parents with children at home who would get a raise under the Raise the Wage Act, about 71 percent (over 6.6 million) are mothers.
- More than one-fifth of all children in the U.S.—15.2 million—live with at least one adult who would get a raise. Affected workers who have children and/or spouses typically are the primary breadwinners for their families.
Raising the minimum wage could help close the gender wage gap.
- By lifting wages for the lowest-paid workers while leaving wages unchanged for those at the top, raising the minimum wage would likely narrow the range of wages paid to workers across the economy—and because women are the majority of workers who would see their pay go up, increasing the minimum wage could narrow the gender wage gap as well.
- States with higher minimum wages tend to have smaller wage gaps: women working full time in states with a minimum wage of at least $9 per hour face a gender wage gap that is 29 percent smaller than the wage gap across states with a $7.25 minimum wage—and for women working full time in states with a minimum wage of $10 per hour or more, the wage gap is 34 percent smaller.In the states where employers are required to pay their tipped workers the regular minimum wage before tips, the overall wage gap for women working full time, year round is 31 percent smaller than in states with a $2.13 tipped minimum cash wage.
A $15 minimum wage for all working people would reduce poverty and income inequality.
- A $15 minimum wage would finally begin to reverse decades of growing pay inequality and would, for the first time, bring full-time minimum-wage earnings above the poverty line for a family of four.
- By 2025, on average, an affected worker who works year-round would see her annual income increase by just under $3,000 under the Raise the Wage Act. The vast majority (83 percent) of tipped workers across the country would get a raise,and be able to count on receiving at least the regular minimum wage before tips. In the states where employers are required to pay their tipped workers the regular minimum wage before tips, the poverty rate for women tipped workers is 28 percent lower than in states with a $2.13 tipped minimum cash wage.
- This wage boost is particularly critical for many part-time workers, who are mostly women and who often struggle to make ends meet due to inadequate hours that are compounded by inadequate wages. Under the Raise the Wage Act, 42 percent of workers who work less than 20 hours per week, and 46 percent of workers who work 20 to 34 hours per week, would get a raise.
- A $15 minimum wage will make a meaningful difference for millions across the country who are struggling to put food on the table, access the health care they need, and support themselves and their families. But it is still a modest wage relative to the expenses that women and their families face every day, no matter where they live in the U.S.
- According to EPI, by 2024, a single worker without children will need at least full-time earnings at $15 an hour ($31,200 annually) to meet basic needs, and workers in costlier areas and those supporting families will need more.
- The Raise the Wage Act sets an appropriate wage floor for the nation. States and localities can and should continue to establish higher minimums, but a regional approach at the federal level would only lock in the low wages that prevail in some regions—disproportionately suppressing wages for workers of color, especially Black workers in the South.
- A robust body of evidence examining the impact of state and local minimum wage increases concludes that such measures have worked exactly as intended—boosting incomes for workers and their families without costing jobs. Raising the minimum wage also can be expected to benefit communities and the broader economy as workers spend their higher earnings at local businesses, and higher wages can benefit employers by reducing turnover and increasing productivity.