Where are the efforts to raise the federal minimum wage?
A restaurant worker at a May 26, 2021 “wage strike” protest by One Fair Wage in Washington, DC
Anna Moneymaker | Getty Images News | Getty Images
The coronavirus crisis has drawn new attention to wages and incomes.
It’s been 12 years since the last federal minimum wage increase, and whether a minimum wage increase will be passed by Congress or not is still a question.
The federal minimum wage is currently $ 7.25 an hour. This salary increase was approved by Congress in 2007, which gradually raised it to the current number in 2009.
For many workers who are trying to get by, this is a problem.
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âThe minimum wage is much lower than it was at its peak over 50 years ago in 1968,â said economist Lawrence Mishel, distinguished fellow of the Economic Policy Institute, who monitors minimum wage changes.
It was even then that the productivity and efficiency of workers more than doubled, he said.
âThe failure to raise the minimum wage has really reduced the wages of the bottom third of the workforce,â Mishel said.
A fight earlier this year to raise the federal minimum wage to $ 15 an hour failed.
One of the reasons why: this change was banned during the so-called reconciliation process. Therefore, a push by some lawmakers for an increase in wage rates was not included.
While some Americans are clamoring for more stimulus checks, others ask: why can’t we have a higher minimum wage instead?
Congress outlook uncertain
“It certainly stays on the Democrats’ agenda,” said Shai Akabas, director of economic policy at the Bipartisan Policy Center, of efforts to raise the minimum wage on Capitol Hill.
However, that doesn’t sound like a short-term goal, he said.
âIt seems unlikely that this will happen in the next few months,â Akabas said.
One of the reasons is that Democrats are talking again about pushing their next package using the reconciliation process. As such, a higher federal minimum wage would not qualify for inclusion.
But while the fight for a higher federal minimum wage on Capitol Hill seems to have stopped for now, it has sparked consumer demand that is driving wages up, said Ed Mills, Washington policy analyst at Raymond James. .
“Democrats did not get their minimum wage through legislation, but they created market conditions such that in many parts of this country $ 15 an hour signs are in operation after the trade window.” , said Mills.
âWages went up to $ 15 an hour faster than they would have if it had been done through legislation,â Mills said.
Some companies and states are moving towards higher wages
Some companies have made headlines for their hourly wage targets. Including Bank of America, which has announced plans to raise its minimum wage to $ 25 an hour by 2025, and retailers like Amazon and Target, which have pledged to pay their employees $ 15 an hour.
Meanwhile, states are stepping in to raise their minimum pay rates. However, none of them have currently implemented a $ 15 hourly wage, although states like Florida are working to achieve this gradually by 2026.
Currently, only four states have minimum wages of $ 12.50 an hour or more, according to Business for a Fair Minimum Wage, which campaigns for higher wages. They include California, Massachusetts, New York and Washington.
Meanwhile, 20 states have salaries that do not exceed the federal minimum wage of $ 7.25.
Notably, President Joe Biden has decided to increase the federal minimum wage for federal contractors to $ 15 an hour.
One of the problems with waiting to remedy low hourly wages is rising inflation, according to Mishel.
“Inflation has already cut the minimum wage a lot,” he said.
One argument against increasing the hourly rate of pay is that it could hurt businesses and jobs. But there is little evidence to support these claims, Mishel said.
âSome businesses can close, but others also open,â he said. âOne wonders if a business can only survive with substandard wages, is that a good result? “