ECONOMIC REPORT OF THE PRESIDENT

Box 3-4: Additional Actions to Make the
Economy Work for All American
This chapter focuses on the Administration’s accomplishments in
restoring growth, guaranteeing access to health insurance, and enacting
a fairer tax code. However, the Administration has taken many other
critical steps to reduce inequality, including both actions with more
immediate effects, such as spurring State action to raise minimum wages,
and actions with primarily longer-term effects, such as improving our
educational system. This box describes the Administration’s actions on
wages and education.
Raising Wages: In his 2013 State of the Union address, the
President called for an increase in the Federal minimum wage. While
Congress has not acted, 18 states and the District of Columbia have
enacted legislation raising their minimum wages since that time. In part
due to these increases, the decline in the value of the effective minimum
wage (the higher of the Federal and State minimum wage in each state
weighted by worker hours) has been reversed, and the effective minimum
wage has now reached roughly the same inflation-adjusted value
it had in 2009 when the Federal minimum last increased (Figure 3-v).
However, despite this progress, too many Americans continue to work
USD (2015)
9
8
7
Figure 3-v
Real Value of Federal and State Minimum Wages, 1985–2017
Average Real
Value of
State/Federal
Minimums
2017
6
Real Value of
Federal
Minimum
5
1985 1990 1995 2000 2005 2010 2015
Note: Average State and Federal minimums are weighted by statewide weekly worker hours as
recorded in the CPS and described further in Autor, Manning, and Smith (2016). For the combined
trendline, the Federal minimum Figure is recorded Vin place of State minimums where the former binds.
Source: Autor, Manning, and Smith (2016); BLS; CBO; CEA calculations.
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