As inflation continues to slowly erode its value, the minimum wage is again being considered by Congress. Currently at $5.15 an hour, it was increased most recently from $4.25 in two steps in 1996 and 1997. A proposal currently before Congress would raise the minimum wage by $1.50 in three steps, to $6.65 in 2003. In addition, the Bush Administration has suggested that states should be allowed to opt out of any minimum wage increase. Before deciding on these important issues, Congress should understand who would benefit from increases in the minimum wage and changes in its coverage. Among the important facts to be considered in the debate are the following findings about the minimum wage: 

• The real value of today’s minimum wage is 30% below its peak in 1968, and 24% below its level in 1979  (Figure 1). 

• If the minimum wage were increased to $6.65 today, 11.9 million workers, or 9.9% of the workforce, would be affected. 

• By 2003, when the proposed increase would be fully phased in, 5.8% of the workforce would benefit. • Adults, women, and racial minorities are disproportionately helped by increases in the minimum wage. 

• There is no good rationale for allowing states to opt out of the increase. The states most likely to do so are the lowest-wage states, where the increase is most needed. Relative to higher wage states, those states with the lowest wages were not negatively affected by the last minimum wage increase.

 • The slowing economy should not preclude the proposed increase. Evidence from the last time the minimum wage was raised during a downturn (1990-91) reveals that there were no job losses associated with the increase.