$15 minimum wage: everything you need to know about the debate
(CNN) -- House Democrats have included a $15 minimum wage increase in their latest covid relief bill, though opposition among some Senate Democrats means they're not on board. It is clear that they will have the votes to approve it.
Improving workers' pay is unrelated, as raising the minimum wage has long been a Democratic priority. It is entirely related to the fact that the pandemic economy has hurt low-wage workers, for example, those working in food service, child care and home health care, who cannot work from home, more than people who can do their jobs from home.
The argument about income inequality, which is growing in the United States, is central to the widespread effort to raise the minimum wage.
"A $15 minimum wage is not a radical idea," Vermont Sen. Bernie Sanders said recently on Twitter. "What is radical is the fact that millions of Americans are being forced to work for starvation wages, while 650 billionaires became over a trillion dollar richer during a global pandemic. Yes. We must raise the minimum wage to a living wage."
Here's what you need to know to understand the debate.
What is the current minimum wage?
The federally mandated minimum wage is $7.25 per hour.
But the minimum wage is actually different across the country. Some states have a much higher minimum wage than others, and some cities are even higher than the rest of their states. The highest minimum wage is $15 in Washington.
There is also a large exception to the minimum wage for workers who collect tips, such as waiters. The federal minimum for such workers is just $2.13 an hour.
When was the last time the minimum wage changed?
While states and cities have recently increased their own minimum wages, in some places, after voters approved measures in the ballot, it has been over a decade since the federal minimum wage was last raised in 2009.
That 12-year gap is the longest American workers have gone without a raise.
The minimum wage was first enacted in 1938 at $25 cents an hour.
How far does that $7.25 go?
Not as far as it went in 2009! Due to inflation, you would need $8.81 an hour in 2021 dollars to equal $7.25 in 2009. In that sense, the federal minimum wage has gone down.
When was the minimum wage highest?
In terms of inflation and purchasing power, the minimum wage of $1.60 in 1968 would be worth about $12.27 in 2021 dollars .
How high do Democrats want to raise the minimum wage?
Sanders wants to raise the minimum wage incrementally, by $1 or $1.50 each year, until it reaches $15 an hour in 2025.
But the next part is important. Rather than rely on Congress agreeing to raise the minimum wage again in about 10 years, a bill introduced by Sanders would require the Labor Department to raise it every year based on data from the Bureau of Labor Statistics.
How many people earn the federal minimum wage?
Because many states have their own higher minimum wage, relatively few American workers earn the federal minimum wage.
According to BLS surveys, about 392,000 workers earned the $7.25 minimum wage in 2019 and 1.2 million workers earned wages below the federal minimum. They represent 1.9% of the 82.3 million American workers paid by the hour.
But almost all workers earn less than $15, which is the minimum in only a few places.
Which part of the country has imposed a minimum wage higher than the federal floor?
More than half of the states—29—have a minimum wage higher than $7.25 and $45 Cities have a higher minimum wage than their state, according to the Economic Policy Institute. A large portion of states with a minimum wage above $7.25 automatically increase it with inflation.
Wages went up in 20 states on January 1. California has the highest state minimum wage of $14 an hour for businesses that employ 26 or more people, but San Francisco and other cities in the state have higher wages, as does New York. Seattle and others.
What do we know about people who earn minimum wage?
Again, according to the BLS, they are mostly young and less likely to have more than a high school education, if any. have. They are more likely to work part time than full time. A higher proportion are women than men and are less likely to marry.
The main industry for people who earn minimum wage is the service industry, particularly food service.
The states with the highest proportion of minimum wage workers are in the South: Louisiana, Mississippi and South Carolina, according to the BLS. In the vast majority of states, less than 5% of hourly workers earn minimum wage.
Can you live on minimum wage?
A person who works 40 hours a week and earns the federal minimum wage would earn $15,080.
The federal poverty level in 2021 is $12,880. Thus, a single person working full time and earning minimum wage is technically above the poverty level. However, if the person has a dependent and earns the minimum wage, they fall below the federal poverty level of $17,420.
The poverty level seems incredibly low.
There is criticism of the poverty level as a measure, since it does not take into account the cost of living in different places. MIT professor Amy Glasmeier has developed a "living wage" calculator, which varies by state, county, and city.
It also takes into account different family scenarios, such as one adult with one or more children and two adults with one or both working, and is invariably higher than even the $15 minimum wage.
What would be the effect of raising the minimum wage on businesses?
Many business owners and some economists argue that raising the federal minimum wage hurts businesses and costs businesses jobs. people, particularly in parts of the country with a lower cost of living.
"Large cities with high costs of living, many of which already have or are on their way to a $15 minimum wage, may not experience big consequences. But non-urban areas and places with high costs Lower life spans could be devastated," wrote Rachel Greszler, a researcher at the Heritage Foundation.
What would be the effect of raising the minimum wage on low-wage people?
The nonpartisan Congressional Budget Office predicted that the incremental wage increase to $15 would increase the $333 billion worker wages for 17 million workers whose wages are equal to or less than the minimum and could also affect 10 million workers whose wages are slightly higher. Nearly a million people would be drawn above the poverty level, and the government would spend less money on food assistance programs.
For an in-depth look at the benefits of raising the minimum wage, here's a report from the Economic Policy Institute, which pushes for a wage increase. (In English)
For the argument that raising wages costs American jobs, here's a report from the National Bureau of Economic Research. (In English).
What are corporate America saying about raising the minimum wage?
Several massive companies, Amazon and Target, under public pressure from activists, have committed to their own US$ minimum wage 15. Walmart has raised wages well above the $7.25 floor, but it doesn't automatically pay all of its employees $15 an hour, though it argues that with benefits, its employees are compensated above that level.
Which legislators are key to this debate?
The Democrats want to use something called "budget reconciliation" to pass their covid relief bill because it allows them to maneuver around the filibuster and pass the measure with a simple majority instead of a supermajority of 60 votes.
But they will need an amicable decision from the Senate member that the pay increase is appropriate (this is not guaranteed) and also a vote of all Democratic senators (two oppose).
Which Democrats are opposed to raising the minimum wage?
Democratic Sen. Kyrsten Sinema of Arizona has said she will not support the bill because, in her opinion, it is unrelated to the pandemic.
"The important thing is whether or not it's directly related to short-term covid relief. And if it's not, then I'm not going to support you on this legislation," Sinema told Politico. "The minimum wage provision is not appropriate for the conciliation process. It is not a budget item. And it should not be there."
Interestingly, Arizona has already raised its minimum wage to one of the highest state minimum wages in the country, by more than $12. Like the Democrats' national proposal, it is tied to the cost of living and rises with inflation .
Sen. Joe Manchin of West Virginia, another moderate Democrat, also opposes using reconciliation to pass the measure. He sees a salary of $11 as more appropriate for West Virginia, where the state minimum wage has been set at $8.75 since 2016.
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