RaisingtheMinimumWage|Conroy1

ThePeoplesPapers

EnoughtoLiveOn:TheCaseForRaisingthe
MinimumWage
HannahConroy
13April2015

ThecurrentminimumwageinAmericais$7.25perhour.However,thereisdisagreementover
whetherthisisafairandlivingwage.Someargue$7.25perhourisafairwagetopayworkersin
minimumwagejobs,whileotherargue$7.25issimplynotenoughforsomeonetoliveon.The
ideaofraisingtheminimumwageisacontroversialissueinthecountryrightnow,withboth
politiciansandcorporationsweighingin.PresidentObamasuggestedtheideaofaminimum
wageraiseinhis2014StateoftheUnionaddress,bringingtheissuetonationalattention.The
PresidentcalledonCongresstoraisethenationalminimumwagefrom$7.25to$10.10anhour,
andsoonaftersignedanExecutiveOrdertoraisetheminimumwageto$10.10forthe
1
individualsworkingonnewfederalservicecontracts.
PresidentObamasstatementsand
actionsonanationalstagebroughttheissuetoforefrontofmanyAmericansminds.The
PresidentsexecutiveactionalsoimpactedmanyworkingAmericans,makingthisissuea
personalone.Workersonnewfederalservicecontractsnowmake$10.10anhour,andPresident
Obamawouldliketoseethiswagebecomethenewfederalminimumwageforallworkers.The
President,andmanyothers,believethecurrentminimumwageisnothighenoughtokeepmany
workersandtheirfamiliesabovethepovertyline.Anincreasedminimumwageof$10.10per
hourwouldliftfamiliesoutofpovertyanddecreasethenumberofAmericansreliantonfederal
benefits,whileaidingbusinessesbigandsmall.

Workersthemselvesarealsorealizingtheneedforahigherminimumwage,asdemonstratedby
thefastfoodworkerstrikesofrecentyears.InDecemberof2014,fastfoodworkersin200cities
walkedoutofworktoprotestlowwages,makingtheeventthemostwidespreadwalkoutsthe
2
industryhasseentodate.
AseventssuchasthefastfoodstrikesandObamasexecutiveactions
makenationalheadlines,ordinaryAmericansandworkersarecomingtoseetheimportanceof
raisingthewage.Furthermore,individualpoliticiansarecomingtoseetheimportanceashigh
profilelawmakersattempttoliveonminimumwagethemselvesandexperiencehowdifficultit
is.

GovernorTedStrickland,theformerDemocraticgovernorofOhio,attemptedtoliveon
minimumwageforaweekin2014.Theweeklybudgetforsomeonemakingminimumwage
worksoutto$77forthewholeweekfood,transportation,andanyotherexpensesmustbe
containedwithinthisbudget.GovernorStricklandsaysthathedidntmakeitheranoutof
moneyonThursday.Thelimitedbudgetchangedhislifedrastically.Inarticlefor
Politico
,
Stricklandwrote:I
walkedasmuchasIpossiblycouldtoavoidpayingfortransportation,
skippedmealstosavemoneyandIatemuchsmallerandlesshealthfulmealswhenIdid


RaisingtheMinimumWage|Conroy2

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eat...freshfruitsandvegetablesarehardtofindatapricewithinaminimumwagebudget.

GovernorStricklandtriedandfailedtodowhatmillionsofAmericansmustdoeverymonth.
Afterhisexperience,hecalledmembersofCongresstoliveonminimumwageforaweekbefore
opposinganincrease,toseehowtheAmericanstrulyaffectedbythispolicylive.Americans
livingonminimumsimplyscrapeby.Thecurrentminimumwageisnotasustainable,living
wage.

ProblemsWiththeCurrentWage
TheRealValueoftheMinimumWage
Theminimumwagehasnotbeenincreasedsince2009,whenitwassetto$7.25perhour.
Furthermore,therealvalueoftheminimumwagehasdecreasedintheyearsfollowing.When
adjustedforinflation,theminimumwageof$7.25in2009wasequalto$7.87in2013dollars.
Thismeanstheminimumwagehaslostabout5.8%ofitspurchasingpowertoinflationsince
4
2009.
Costshavebeenrisingasinflationrises,buttheminimumwagehasnotbeenraisedto
keepup.Furthermore,theminimumwagehasneverbeenashighasitwasin1968,whenitwas
5
$1.60.Whenadjustedforinflation,thatisequalto$10.71in2013dollars.
Onthesurface,it
seemsasiftheminimumwagehasbeenrising,creatingtheillusionthatthecurrentminimum
wageisfairandalivingwage.However,ithasnotbeenrisingenoughtokeepupwithrising
pricesandinflation,makingitnecessarytoincreasethewagenow.Today,theminimumwage
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buysyouabout20%lessthanitdidin1981.
Asthefigurebelowillustrates,thecostofgoods
hasrisen8.2%overthepastfiveyears,whilethevalueofminimumwagehasfallen7.6%.The
minimumwagesimplydoesnotbuyasmuchasithasinthepastandneedstoberaisedtokeep
upwithrisingprices.


RaisingtheMinimumWage|Conroy3

Oneparticularlyworryingexampleofthedecliningpurchasingpoweroftheminimumwage
relatestocollegetuition.Studentscannolongersimplyworktheirwaythroughcollege,asthe
minimumwagehasnotkeptupwiththepriceofcollegetuition.AccordingtotheUS
DepartmentofLabor,astudentworkingaminimumwagesummerjobin1978couldearn
enoughmoneytotopayforoneyearoftuitionandfeesatapublicuniversity,andenoughleft
overtopayforhalfoftheroomandboardcosts.Today,however,astudenthastoworkatleast4
8
andahalfmonthsataminimumwagejobtopayfortuitionandfees.
Theminimumwagehas
notbeenincreasinginlinewithotherpricesandexpenses,makingitnecessarytoraisethewage
now.

PovertyandtheCurrentMinimumWage
Thecurrentminimumwageisnotenoughmoneyformanypeopletosupportthemselveson,
especiallyworkerswithfamilies.Workerswhocurrentlymaketheminimumwageoftenlive
belowthepovertyline,especiallythosewithfamiliestosupport.AstudybyaUniversityof
MassachusettsAmhersteconomist,ArinDube,foundthatanincreaseintheminimumwage
reducespoverty.
Raisingtheminimumwage10percent(sayfrom$7.25tonear$8)would
reducethenumberofpeoplelivinginpoverty2.4percent...Usingthisasanestimate,raisingthe
minimumwageto$10.10anhour...wouldreducethenumberofpeoplelivinginpovertyby4.6
9
million.

Byraisingtheminimumwageto$10.10,4.6millionAmericanswouldnolongerin
poverty.Asthefigurebelowillustrates,thecurrentminimumwagedoesnotprovideenough
moneyforafamilytoliveabovethepovertyline,evenifitsonlyatwopersonhousehold.A
familywithaworkingadultshouldnothavetoliveinpoverty,howeverthatsimplyisthereality
forfamiliestryingtosurviveonminimumwage.

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RaisingtheMinimumWage|Conroy4

AnIncreaseintheMinimumWageDecreasesSpendingonEntitlementPrograms
Anincreaseintheminimumwagewouldhelppeoplebeabletobetterprovideforthemselves,
andmakethemnolongerreliantonfederalassistanceprograms.Theneedforprogramssuchas
theSupplementalNutritionAssistanceProgram(SNAP),formerlyknowntheFoodStamp
program,woulddecreasewithahigherminimumwage.TheCenterforAmericanProgress
conductedastudyontheeffectanincreaseoftheminimumwageto$10.10perhourwouldhave
onenrollmentinSNAP.TheCenterfoundaminimumwageincrease
to$10.10perhourwould
reduceSNAPenrollmentsbybetween7.5percentand8.7percent(3.1millionto3.6million
persons).Thetotalanticipatedannualdecreaseinprogramexpendituresisnearly$4.6billion,or
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about6percentofcurrentSNAPprogramexpenditures.
Asimpleincreaseintheminimum
wagewouldsavemillionsofdollarsingovernmentspendingonSNAP,freeingupthemoneyto
bespentelsewhere,whichthegovernmentdesperatelyneeds.AsAmericansgaintheabilityto
payfortheirownfood,thegovernmentnolongerneedstosubsidizetheirfoodthroughSNAP.
TheAmericangovernmentisrunninganenormousdeficit,andcouldspendthemoneyina
plethoraofareas.Thisisrealmoneythatcouldbespentimprovingtheservicesprovidedtothe
mostneedycitizens.Forexample,themoneycouldusedtoclosetheMedicaidgap,orperhapsto
fundmorewelfaretoworkprograms,makingitpossibleformorepeopletotakeadvantageof
theincreasedminimumwage.Increasingtheminimumwageto$10.10perhourliftsmillionsof
peopleoutofpoverty,makingthemlessreliantongovernmentassistance,therebydecreasing
governmentspendingonfederalentitlementprogramsbybillionsofdollars.

WhoanIncreasedMinimumWageWouldAid
WorkingAdults
Manypeoplebelievethatthosewhowouldbenefitfromanincreasedminimumwageare
teenagersworkingminimumwagejobsforextraspendingmoney.However,thisisoftennotthe
case.TheUSDepartmentofLaborreveals
thetypicalminimumwageworkerisnota
highschoolstudentearningweekendpocketmoney.Infact,88percentofthosewhowould
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benefitfromafederalminimumwageincreaseareage20orolder.
Thefigurebelowshows
thetruedemographicsofaminimumwageworker,andhowtherealitydiffersvastlyfromwhat
manypeoplebelieve.

WhoisHelpedByRaisingtheMinimumWage?

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RaisingtheMinimumWage|Conroy5

Workerswhomakeminimumwagetrulyneedthismoneytoprovideforthemselves,theyare
adultstryingtomakealiving.In1968,afulltimeminimumwageworkercouldsupportafamily
14
ofthree.
Today,however,survivingonminimumwageisastruggleforoneperson.
Themajorityofpeopleearningminimumwagearenotteenagerssimplywantingmoneyfor
spendingwiththeirfriends,adultsneedtosupportthemselvesonminimumwage.Inthepast,
thiswaspossible,itjustsimplyisnottoday.Weneedtoraisetheminimumwagesoworking
adultscansupportthemselvesandtheirfamilies.

WomenandChildren
ManyadultAmericanswouldbenefitfromanincreaseintheminimumwage,especiallywomen,
whoconstituteadisproportionatepercentageoftotalminimumwageearners.Infact,adult
womenarethesinglebiggestdemographicgroupamongminimumwageworkers,far
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outnumberingteenagersofbothgendersandmenofallages
Women,moresothanmen,must
surviveonawagethatistoolowtolivecomfortably.Itisnotforalackofhardworkthatthey
mustliveonalowwageoverhalfofthewomenwhowouldbenefitfromaminimumwage
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increaseworkfulltime.
Afulltimeworkershouldnotstruggletoscrapeby,asGovernor
Stricklandexperiencedhimself.Furthermore,manywomenareworkingtosupporttheirfamily,
alongwiththemselvesofthewomenwhowouldbenefitfromanincreasedminimumwage,over
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25%havechildren.
Thesewomenareworkingincrediblyhardtosupporttheirfamilies,and
simplycannotgiventhecurrentwage.Nochilddeservestoliveinpoverty,howeverpovertyis
simplyrealityforthesechildren.Anincreasedminimumwagewouldpropel19%ofchildren
intoabetterlife,astheirparentswouldnowmakeenoughmoneytosupporttheentirefamily..
Aswomendisproportionatelymakeminimumwage,theirfamiliesandchildrenface
disproportionatehardship.

HowWouldAMinimumWageIncreaseAffectAmericanFamilies?

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RaisingtheMinimumWage|Conroy6

Veterans
Furthermore,manyveteranswouldbeaidedbyanincreaseintheminimumwage.Thesemen
andwomenfightforourcountry,andthenreturntoworkjobsthatprovidethemwithbarely
enoughmoneytosurviveon.Onemillionveteranswouldbepositivelyaffectedbyanincreasein
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theminimumwage.
Onemillionmoremenandwomenwhofoughtforourcountrywouldhave
ahigherstandardoflivingandamorecomfortablelife.Theywouldbebetterabletoprovidefor
themselvesastheirfamilies.Overall,itisnotjustteenagerswhowouldbeaidedbyanincreased
minimumwage.Adults,especiallywomenandthosewithchildren,andveteranswouldreceive
higherwages.

BusinessesSupportRaisingtheMinimumWage
SupportFromBigBusinesses
Despitethecommonbeliefthatbusinesseswouldsufferunderahigherminimumwageanddo
notsupportraisingit,manybusinessesdoinfactsupportaraise.Businesseswhoraisetheir
wagesreceivebenefitsoutsideofsimplyincreasingthequalityoflifefortheiremployees.Many
largecorporations,suchasTargetandWalmartrecentlyraisedtheirwagesindependently,as
theysawthebenefitsahigherwagecouldhavefortheircompany.
Target
Corp.planstoboost
payofallitsworkerstoatleast$9anhourstartingnextmonth,followingsimilarmovesby
20
rivals
WalMartStores
Inc.and
TJX
Cos..

Companiesarestartingtoseethebenefitsofa
wagehigherthan$7.25anhour,fortheirworkersandtheircompany,andhavetakenaction
themselves.Targetraisedtheirwagesasawaytostaycompetitiveinaworldofatightening
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labormarketandrisingcompetitionforlowerpaidworkersamiddecliningjoblessness.

Workersareattractedtocompaniesthatcanofferahigherwage,makingbusinesswithawage
above$7.25anhourmoreattractivetoanincreasinglysmallworkforce.Asmoreandmore
peoplefindjobsaftertherecession,therearefewerworkersavailabletoworkthelowerwage
jobs,makingbusinesseseagertofindnewwaystoattractworkers.Bigbusinesseswithdeep
pocketsarenottheonlyonestosupportanincreasedwage,however.Thereareeconomic
benefitsforbusinesses,beyondemployeeattraction,thatmakeraisingtheminimumwagean
attractiveideatosmallbusinessesaswell.

SupportFromSmallBusinesses
Manysmallbusinessalsosupportincreasingtheminimumwage,astheyseethebenefitsa
higherwagecouldhavefortheirbusinessandtheiremployees.AJune2014surveyfoundthat
morethan3outof5smallbusinessownerssupportincreasingtheminimumwageto$10.10an
hour.Smallbusinessownersbelievethatahigherminimumwagewouldbenefitbusinessin
importantways:58%sayraisingtheminimumwagewouldincreaseconsumerpurchasing
power.Furthermore,56%sayraisingtheminimumwagewouldhelptheeconomy.Inaddition,
53%believethatahigherminimumwagewouldbenefitbusinessesthoughloweremployee
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turnover,increasedproductivityandcustomersatisfaction.

Overhalfofsmallbusinessowners
supportraisingtheminimumwageto$10.10,astheyseethebenefitsanincreasedwagecould
haveforthebusiness.Anincreasedwagecanattractemployeestoabusiness,makingit
advantageousforbusinesseslookingtobesuccessfulinacompetitivelabormarket.Also,the
employeesofabusinessarealsohappierwhentheyaremakinghigherwages,whichcanmake
themmorelikelytostaywiththecompanyovertime,decreasingemployeeturnover.Employee


RaisingtheMinimumWage|Conroy7

productivitymayalsoriseasemployeesearnmore.Smallbusinessownersseethepositive
effectsahigherminimumwagewouldhavefortheirbusinessesandsupportanincreaseinthe
wage,despitecommonbeliefthatsmallbusinesseswouldopposearaise.

AHigherMinimumWageHelpsEveryone
Businessesalsosupportanincreasedminimumwageastheyseethepositivespillovereffecta
higherwagecanhaveonlocalcommunities.Anincreasedminimumwagemeansemployees
havemoremoneytospend,andtheyputthatmoneybackintotheeconomythroughpurchases.

Economistsgenerallyrecognizethatlowwageworkersaremorelikelythananyotherincome
grouptospendanyextraearningsimmediatelyonpreviouslyunaffordablebasicneedsor
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services.

Ifallworkersweremakingmoremoney,morepeoplewouldmakepurchasesfrom
morebusinesses,benefittingeveryone.Asthefigurebelowdemonstrates,asminimumwage
workersmakemoremoney,theyalsospendmore,benefittingthelocaleconomy.

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Anothermisconceptionaboutraisingtheminimumwageisthatanincreasedwagewillleadto
jobloss,asbusinesseswillbeunabletoaffordpayingtheincreasedwage.However,thisisnot
thecase.Anincreaseintheminimumwagewouldincreasejobs,as
raisingtheminimumwage
putsmoremoneyinthepocketsofworkingfamilieswhentheyneeditmost,therebyaugmenting
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theirspendingpower.

Asworkersfindthemselveswithmoremoneythanbefore,theywill
spendthatmoneyonthingstheycouldnotaffordbefore,boostingconsumerspendingoverall.
Thisboostleadstohigherprofitsforbusiness,makingitpossibleforthemtoaffordthehigher
wage.Ifmorebusinessesweretoseethebenefitseveryonecouldreceivefromahigher
minimumwageandinturnraisedtheirwages,thefederalgovernmentmayrealizethesupport
Americanshavefortheissueandtakeaction.

InConclusion
AhigherminimumwagewouldbenefitmillionsofAmericansandtheirfamilies,alongwith
businessesbigandsmall.Anincreasedminimumwage,to$10.10perhour,wouldliftmillions


RaisingtheMinimumWage|Conroy8

ofAmericansoutofpovertywhocurrentlycannotliveabovethepovertylineon$7.25.Asthese
Americansbecomeselfsufficientfromamonetaryperspective,theywillnolongerberelianton
federalbenefits,suchasSNAP,freeingupbillionsofdollarsingovernmentspending.The
sweepingeffectsofthiswageincreaseexpandswellbeyondteenagerssimplyearningpocket
money.Workingadults,especiallywomenandtheirchildren,willbehelped.PresidentObama
hasexpressedhissupportforanminimumwageof$10.10anhour,andhastakenexecutive
actiontomakethatwagearealityfornewfederalcontractworkers.Furthermore,thefederal
governmentisnotaloneinsupportingthiswageincrease.Bigbusinesses,suchasTargetand
Walmarthaveindependentlyraisedtheirwages,andamajorityofsmallbusinessownersalso
supportanincreaseintheminimumwage.Anincreasedminimumwageallowsbusinessesto
attractemployeesinanincreasinglycompetitivelabormarket,makingawageincreasean
enticingideatobusinessesstrugglingtokeepandattractworkers.Anincreasedminimumwage
alsoputsmoremoneyinthepocketsofpeoplewhoneeditmost,whothenspendthatmoneyon
thingstheypreviouslycouldnotafford.Thespendingthenstimulatesthelocaleconomy,asthe
workersspendingputsmoneybackintolocalbusinesses.Overall,aminimumwageof$10.10
perhourhelpsworkingadultsandthebusinesseswhichemploythem,whilesavingthefederal
governmentmoney.Anincreasedminimumwagewouldliftfamiliesoutofpoverty,aidworking
adultsanddecreasefederalspendingonentitlementprogramssuchasSNAP.

Businessownersshouldreviewtheeconomicrealitiesandunderstandthepositiveeffectsan
increasedminimumwagewillhaveontheircommunities,theiremployees,andtheirbusiness,
andraisetheirwages.Statelegislatorsshouldalsoseetheimpactanincreasedminimumwage
canhaveintheirstate,suchasliftingresidentsoutofpoverty.Asmoreandmorestatesraise
theirwages,hopefullyotherswillfollowsuitastheyrealizethepositivebenefitsoftheliving
wage.Ideally,thefederalgovernmentshouldraisethefederalminimumwageforallworkers.
Eachstatemustmatchorsurpassthefederalminimumwage,makinganincreaseinthefederal
minimumwagethemostefficientwaytoachieveoverarchingreform.Overall,businessesand
politiciansshouldraisetheminimumwageinanywaytheycan,hopefullydemonstratingthe
benefitstootherbusinessesandpoliticianswhilebenefittingworkingAmericans.


RaisingtheMinimumWage|Conroy9

Endnotes
1. "RaisetheWage."TheWhiteHouse.TheWhiteHouse,n.d.Web.05Apr.2015.
2. Eidelson,Josh."FastFoodStrikesHitRecordNumbers,Span190Cities."
Bloomberg.com.Bloomberg,5Dec.2014.Web.05Apr.2015.
3. Strickland,Ted."ITriedtoLiveonMinimumWageforaWeek."POLITICOMagazine.
N.p.,27July2014.Web.05Apr.2015.
4. Disilver,Drew."5FactsabouttheMinimumWage."PewResearchCenterRSS.N.p.,04
Dec.2013.Web.12Apr.2015.
5. Kurtz,Annaly,andTalYellin."MinimumWagesince1938."CNNMoney.CableNews
Network,2013.Web.12Apr.2015.
6. WhiteHouseWhiteboardShorts:#RaiseTheWage.YouTube.TheWhiteHouse,10Oct.
2014.Web.12Apr.2015.
7. TheMinimumWageOverTime.Digitalimage.MinimumWageShareables.TheUnited
StatesDepartmentofLabor,n.d.Web.12Apr.2015.
8. EducationandTheMinimumWage.Digitalimage.MinimumWageShareables.United
StatesDepartmentofLabor,n.d.Web.12Apr.2015.
9. Konczal,Mike."EconomistsAgree:RaisingtheMinimumWageReducesPoverty."
WashingtonPost.TheWashingtonPost,4Jan.2014.Web.22Mar.2015.
10. TheCurrentMinimumWageIsNotEnoughforWorkersandTheirFamiliestoGetOut
ofPoverty.Digitalimage.RaisetheWage.WhiteHouse,n.d.Web.5Apr.2015.
11. West,Rachel,andMichaelReich."TheEffectsofMinimumWagesonSNAP
EnrollmentsandExpenditures."CenterforAmericanProgress.N.p.,5Mar.2014.Web.
22Mar.2015.
12. "MinimumWageMythbusters."U.S.DepartmentofLabor.N.p.,n.d.Web.05Apr.
2015.
13. Who'sHelpedByRaisingtheMinimumWage?Digitalimage.EconomicPolicyInstitute,
n.d.Web.5Apr.2015.
14. TheMinimumWagein1986.Digitalimage.MinimumWageShareables.UnitedStates
DepartmentofLabor,n.d.Web.12Apr.2015.
15. Tyson,LauraD'Andrea."TheSignificanceoftheMinimumWageforWomenand
Families."EconomixBlog.TheNewYorkTimes,07Mar.2014.Web.05Apr.2015.
16. WhiteHouseWhiteboardShorts:#RaiseTheWage.
17. ibid
18. HowWouldAMinimumWageIncreaseAffectAmericanFamilies?Digitalimage.
EconomicPolicyInstitute,n.d.Web.5Apr.2015.
19. Cooper,David."AMillionVeteransWouldBenefitfromaMinimumWageIncrease."
TheEconomicPolicyInstituteBlog.EconomicPolicyInstitute,24Apr.2014.Web.05
Apr.2015.
20. Ziobro,Paul."TargettoIncreaseWagestoAtLeast$9/HourforAllWorkersinApril."
TheWallStreetJournal.N.p.,19Mar.2015.Web.22Mar.2015.
21. ibid
22. "MinimumWageMythbusters."U.S.DepartmentofLabor.
23. Cooper,David,andDougHall."HowRaisingtheFederalMinimumWageWouldHelp
WorkingFamiliesandGivetheEconomyaBoost."EconomicPolicyInstitute.N.p.,14
Aug.2012.Web.05Apr.2015.


RaisingtheMinimumWage|Conroy10

24. MinimumWageInfographic.Digitalimage.WomenEmployed.N.p.,n.d.Web.5Apr.
2015.
25. Cooper,David,andDougHall."HowRaisingtheFederalMinimumWageWouldHelp
WorkingFamiliesandGivetheEconomyaBoost."