Overview

The minimum wage is one of the primary tools for raising the wages of low-income workers. This was the case at its inception in some states in the early 20th century, as a key federal component of the New Deal reforms during the Great Depression, and today, amid the coronavirus recession. Importantly, though, reforms in the 1960s turned the minimum wage into a critical tool for decreasing the wage divides between Black and White workers because Black Americans were overrepresented among low-wage workers who were not initially covered by the federal minimum wage. Yet those reforms six decades ago are now increasingly unable to address racial income inequality without keeping pace with inflation and economic growth.

Indeed, the coronavirus recession demonstrates how persistent disparities in economic security by race and ethnicity are exacerbated in a crisis. Black and Latinx households today are more likely to report a loss in income and difficulty paying expenses. And the tenuous partial recovery of the U.S. labor market since the start of the current recession now appears to have stalled, leaving Black and Latinx workers with significantly elevated unemployment in the double digits.