Doubling the minimum wage to lift millions of Americans out of poverty. Joe Biden’s ambitious proposal, already on the legislature’s desk, could result in a social revolution for the poorest in the United States, a country with striking socio-economic disparities.
Even before the pandemic, the federal minimum wage of $ 7.25 (per hour) was economically and morally indefensiblesaid Virginia Democratic lawmaker Bobby Scott who introduced the bill.
This has not changed an iota since July 24, 2009.
While the initiative is very popular with the population – even in the ranks of Republicans – and has been supported by the unions for more than a decade, it has met with opposition from Republicans under pressure from corporate lobbies who reject the additional cost.
“It’s not a radical ideal”
“This is not a radical ideal,” said Bernie Sanders, a former progressive presidential candidate who called the $ 7.25 “starvation wages.”
“In the richest country in the world, if you work 40 hours a week, you shouldn’t be living in poverty”urged the Vermont senator, who is promoting the project, and hopes to convince the skeptics.
The economic crisis resulting from the coronavirus pandemic mainly affects small businesses, especially in the gastronomy and service sector. Therefore, they are not looking forward to this proposal included in the massive $ 1.9 billion bailout.
The Vice President of the National Federation of Restaurants (NRA), Sean Kennedy, has welcomed the project again, especially as he understands the obligation to pay this minimum wage in full regardless of tips imposed on customers. This allows bosses to pay employees as little as two or three dollars if these famous “tips” fill the $ 7.25 gap.
This measure ‘entails insurmountable costs’ For many branches that have no choice but to fire or permanently close more employees, Kennedy predicts.
New Treasury Secretary Janet Yellen responds that “raising the minimum wage will lift tens of millions of Americans out of poverty and create opportunities for countless small businesses across the country.”
It all depends on how it is implemented, he argued, aiming for a gradual increase ($ 15 by 2025) that “gives enough time to adapt.”
Is it good or bad for the economy? This debate has been harsh among economists for centuries and has not been resolved, especially as the economic reality is not the same in New York (many opportunities, high cost of living …) or Mississippi (less dense economic fabric, much cheaper living …) .).
Virtuous circle?
But Joe Biden’s government emphasizes the positive cycle: Paying those with the lowest wages would generate billions of dollars in additional consumer spending on goods and services provided by small businesses.
In 2019, approximately 1.6 million workers had wages at or below the federal minimum, that is, 1.9% of all workers paid by the hour, according to the Bureau of Statistics of the United States.
That’s a small number, because the minimum wage, introduced in 1938 by then-President Franklin Roosevelt during the Great Depression, has become theoretical over time.
While southern and central states generally apply the minimum wage, eastern states and the wealthy like California have set a much higher rate – $ 12, $ 13, or even $ 15.
And large companies such as online trading giant Amazon and coffee shop chain Starbucks are already paying a salary of $ 15 to attract workers.
The salary of Maggie Breshears, an employee of the Fred Meyer group in Seattle, is $ 17.59 compared to $ 10 in 2013.
“If you can offer someone a job, you have to pay them a living wage to live,” he says.
With a simple majority?
A wage of $ 15 an hour by 2025 would increase the wages of 27.3 million people and lift 1.3 million families out of poverty, the Congressional Budget Office calculated. But he also estimates that this could lead to the loss of 1.3 million jobs.
For Gregory Daco, chief economist at Oxford Economics, the proposal illustrates, apart from the potential impact, the social change Joe Biden wants.
This “confirms a government’s will to focus more on the social and racial inequalities that had created strong tensions last year” during the administration of Republican magnate Donald Trump, he insists.
The proposal will be difficult to pass, even if Democrats have a majority in both houses.
However, Bernie Sanders has already mentioned the possibility of using an instrument to enact the law by simple majority.