Double the minimum wage to lift millions of Americans out of poverty is the ambitious proposal of Joe Biden, which is already on the desk of lawmakers. This could result in a social revolution for the poorest U.S, a country with striking socio-economic differences.
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“Even before the pandemic, the federal minimum wage of $ 7.25 (per hour) was economically and morally indefensible.”said Virginia Democratic legislator Bobby Scott introducing the bill.
This has not changed an iota since July 24, 2009. While it is very popular with the population – even in the ranks of the Republicans – and has been backed by the unions for over a decade, The initiative has clashed with Republican opposition under pressure from lobbies from companies that reject the extra costs.
The US economy suffered its worst decline since World War II. With a 3.5 percent contraction in 2020, the outlook is “highly uncertain”.
Johannes Eisele. AFP
‘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 services sector.
Therefore, they are not looking forward positively to this proposal that is 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.
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This allows bosses to pay employees only two or three dollars if you are famous. “tips” fill the $ 7.25 gap. This measure “will incur insurmountable costs” for many facilities that have no choice but to lay off more employees or close down permanently, Kennedy predicts.
New Treasury Secretary Janet Yellen replies 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, with the goal of a gradual increase ($ 15 by 2025) that gives “enough time to adapt”. Is it good or bad for the economy?
This debate has been brutalized among economists for centuries and has not been resolved, especially since the economic reality is not the same in New York (many possibilities, high cost of living …) or in Mississippi (less dense economic fabric, much cheaper life …).
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The United States announced an agreement for a $ 2 trillion stimulus plan to revive the world’s first economy.
But Joe Biden’s records highlights the positive circle: Paying those with the lowest wages would add billions of dollars in additional consumer spending on small business goods and services.
In 2019, approximately 1.6 million workers had wages at or below the federal minimum, that is, 1.9% of all clock workers, according to the US Bureau of Statistics.
That’s a small number because of the minimum wage, introduced in 1938 by the then president Franklin Roosevelt during the Great Depressionhas become theoretical over time. While southern and central states generally apply the minimum wage, eastern and wealthy states such as 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 recruit 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.
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.
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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.
AFP
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