A Dime a Day: The Impact of the Miller/Harkin Minimum Wage Proposal on the Price of Food
October 2012 by Chris Benner, Associate Professor, Center for Regional Change, University of California, Davis Saru Jayaraman, Director, Food Labor Research Center, University of California, Berkeley » Report » Press Release
Opponents of raising the federal minimum wage often argue that, while the increase in wages may benefit low-wage workers, it will also increase the cost of food and other basic goods, thus hurting the very people the minimum wage increase is intended to help. In this report, we provide a detailed analysis of the potential increase in food prices of new legislation proposed by Congressmember George Miller (D-CA) and Senator Tom Harkin (D-IA) that would increase the minimum wage to $9.80 over a three-year period, as well as increase the tipped minimum wage, which currently stands at $2.13, until it reaches 70% of the full federal minimum. We find that while the Miller/Harkin bill would provide a 33% wage increase for regular minimum wage workers and would more than double the wages of tipped workers over the same period, retail grocery store food prices would only increase by an average of less than half a percent over the three-year phase-in of the new minimum wage, and restaurant food prices would increase by less than one percent per year. This increased cost of food, both away and at home, would amount to about 10 cents more per day on average for American households over the three-year period.
A new report released today (Wednesday, Oct. 24) in observation of national Food Day 2012 says that a proposal pending in U.S. Congress to raise the minimum wage would increase retail food prices for American consumers by at most 10 cents a day, while helping nearly 8 million food workers and 21 million workers in other industries.
The report from the recently established Food Labor Research Center, based at the University of California, Berkeley’s Center for Labor Research and Education, along with the Food Chain Workers Alliance and the Restaurant Opportunities Centers (ROC United) looks at the proposed “Fair Minimum Wage Act of 2012.” The act would represent the first increase in the non-tipped minimum wage in five years and the first in 21 years for tipped workers, who because they make $30 or more in tips a month, can be paid less than other workers. “Food workers are some of the lowest-paid workers in America, and they face much higher levels of food insecurity than the rest of the U.S. workforce,” said Saru Jayaraman, director of the Food Labor Research Center. “Our report shows that raising the minimum wage would help them put food on the table while barely, if at all, impacting everyone else’s ability to put food on their tables, too.” The report, “A Dime a Day: The Impact of the Miller/Harkin Minimum Wage Proposal on the Price of Food,” is authored by Jayaraman and Chris Benner, an associate professor of community and regional development at UC Davis. Jayaraman also is the co-founder and co-director of ROC-United. The country’s food system is the largest employer of minimum wage workers, who hold positions ranging from agricultural field hands and food processing plant workers to cooks in diners and waiters in high-end restaurants.