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It's a honor to be invited here today to talk about how a fair minimum wage can help families support and also succeed broad-based income increase in our society. Raising the minimum wage and ensuring that its value remains at a reasonable amount with time by indexing it to the price of living will probably establish a stronger initial rung on the ladder to economic protection.

The minimum wage is the cornerstone of a group of policies, including the Earned Income Tax Credit, the Affordable Care Act, as well as some yet to be implemented nationwide, such as sick days and paid family and medical leave which provide the foundation for economic protection for workers and their households.

According to economic estimates, increasing the minimum wage to $10.10 a hour will lower the poverty rate for non-elderly Americans to 15.8 percent by 2016 from present 17.5 percentage amounts. Raising the minimum wage will have positive economic effects over and beyond diminishing the poverty rate. Economic research points to the conclusion that a high minimum wage does not cause increased unemployment, boosts productivity, and addresses the increasing problem of rising earnings inequality. The rest of my testimony will concentrate on the facts about the minimum wage, a report on the academic literature on the impact on poverty of increasing the minimum wage, and a consideration of how the minimum wage interacts with other poverty-fighting programs to assist low-wage workers enter the middle class.

The Fair Minimum Wage Act of 2013 will raise the minimum wage to $10.10 in three measures, beginning three months after passage of the invoice and end two years after the initial increase. The Fair Minimum Wage Act is required because Congress has enabled the purchasing power of the minimum wage to decline in the past few years, leaving too many workers toiling full-time, however unable to rise above poverty. The Fair Minimum Wage Act puts the minimum wage at a level which can help workers and their families, be good for the economy, also so are consistent with past levels of the minimum wage.

Back in inflation-adjusted dollars, by 2016 when the Fair Minimum Wage Act will be fully executed, the minimum wage would equal about $9.45 in today's dollars, consistent with past values. Raising the minimum wage is also an important tool, however, the current minimum wage leaves too many families in poverty. The anti-poverty impacts of the minimum wage are significant, but to pull workers and their families up and out of poverty, the minimum wage must work in tandem with income support policies. As economists David Lee, of Princeton University and Emmanuel Saez at the University of California, Berkeley, argue the best minimum wage ought to be paired with a wage subsidy, such as the EITC.

This wage subsidy encourages workers to join the labor force and the minimum wage aids ensures they get an adequate wage to escape poverty. One main reason to concentrate on increasing the minimum wage would be that a higher minimum wage reduces this capture by decreasing the reduction in wages caused by the increase in the supply of work. The economics proof demonstrates that increasing the minimum wage does not lead to higher unemployment however rather boosts productivity and addresses a growing problem in our economy of inequality. Economists David Card, of the University of California, Berkeley, and Alan Krueger, of Princeton University, looked at the effects of a minimum wage hike in New Jersey by assessing fast food restaurant job in the state to fast food usage in Pennsylvania that failed to increase its minimum wage.

Economists have found that the diminishing inflation-adjusted value of the minimum wage had a considerable effect on wage inequality for all those workers in the bottom half of the wage distribution. In English, this usually means the decline in the minimum wage clarified up to a fourth of increasing wage inequality for men and up to three-tenths of increase wage inequality for women. In more recent work, MIT economist David Autor, London School of Economics economist Alan Manning, and Federal Reserve Board economist Christopher Smith find that about 75 percent of the increase in non profit inequality in 1979 to 1991 is due to the decline in the value of the minimum wage, however the decline only clarifies 45 percent of the increase in 1979 to 2009.

One invalid criticism of the minimum wage as a tool is that the minimum wage would benefit teenagers that are working part-time and have been supported by their parents. The Harkin-Miller legislation could raise the minimum wage to 70 per cent of the minimum wage. To compute the effect of increasing the minimum wage on household incomes, CBO uses a simulation to evaluate incomes and wages after a minimum wage increase to a planet where the norm isn't raised. Any effort to decrease poverty and increase economic freedom at the bottom rungs of the income ladder into the middle class needs to include an increase in the minimum wage. The burden of economic research indicates that increasing the minimum wage would decrease poverty and also work in tandem with other poverty-reducing plans to encourage income freedom from the bottom up.

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