President-elect Joe Biden’s proposal to double the federal minimum wage would provide urgent wage increases to millions of low-income workers and help stop inequalities in the United States, economists and laborers said.
In his detail $ 1.9 trillion COVID-19 On Thursday, Mr Biden called for the minimum wage to be raised to at least $ 15 an hour, saying “No one working 40 hours a week should remain below the poverty line”.
A fatter salary could help many Americans regain their financial status during the ongoing recovery, including “essential” workers, such as food officials and home health care workers, whose jobs put them at the forefront. lines of a pandemic, but whose gains are among the lowest.
“Every worker should receive a minimum wage of $ 15, and key frontline workers need a risk payment for the enormous health and safety risks they face during this pandemic,” Marc told CBS MoneyWatch Perrone, International President of United Food and Commercial Workers. in a statement. The union represents 1.3 million employees, food and other workers.
The Biden administration’s future plans to raise wages also reflect a dramatically changing political landscape – one that could ultimately pay off for low-wage workers and grassroots activists who have pressed for years. for better pay and working conditions as part of the influences “Fight for $ 15” campaign.
The success of the labor movement can be seen in the increase in the minimum wage in 20 states this year, with four other states and Washington, DC, which will also increase their core value. pay later this year. Meanwhile, in Florida, December voters narrowly approved a measure to increase the state’s minimum wage to $ 15 an hour by 2026.
Same federal salary since 2009
The federal minimum wage, currently $ 7.25 per hour, has not changed since 2009, the longest period without an increase since it was adopted in 1938. According to the U.S. Department of Labor, starting in 2019 (the last year for which they are available data) 392,000 American workers earned $ 7.25 per hour; another 1.2 million earned even less (contributory workers are among those exempted from the $ 7.25 minimum.)
Overall, about 2% of all American workers who are paid by the hour earn $ 7.25 or less, government figures show. Going to the national minimum of $ 15 an hour by 2025 would raise 1.3 million workers above the wages that place them below the poverty line, according to the budget office of the nonpartisan Congress.
The OBC also estimated that the move would cost 1.3 million American jobs, a statement long made by conservative economists. Mr Biden’s call to raise the minimum wage to $ 15 an hour “is the absolute last thing unemployed workers need right now,” said Michael Farren, an economist with the right-wing Mercatus Center at George Mason University. -an e-mail. “After all, they can’t get higher wages if those higher wages lead to slower job growth.”
Heidi Shierholz, a senior economist and policy director at the left-leaning Institute for Economic Policy, rejects the argument that a pay rise would lead to job losses.
“This claim about job loss is not supported by evidence – it is probably an overestimation of the negative impact on employment. But even if you accept their conclusions, they believe that the benefits far outweigh the costs,” said Shierholz, a former economist. Labor Department chief Barack Obama told CBS MoneyWatch.
Higher labor costs from rising minimum wages would be borne by businesses, some of which would be passed on to consumers, according to OBC.
“The loss of business income would be borne mostly by families well above the poverty line. All consumers would pay higher prices, but higher-income families, who spend more, would pay more of these costs.” the CBO said in a 2019 report.
“There is no doubt that this would reduce inequality and reduce poverty by transferring money from corporate profits to low-wage workers,” Shierholz said. “Biden has made it very clear that his economic plans really focus on racial justice and gender economic justice. We know that women and men of color are likely at the end of the payroll.”
Although workers’ groups have cheered Mr Biden’s push for higher wages, the political path of the proposal is uncertain. Democrats could try to adopt Mr. Biden’s broader aid plan in accordance with budget reconciliation rules that cover the Senate’s 60-vote requirement.
But non-budget items are prohibited from reconciliation, which means that items such as a minimum wage increase could not be included in a reconciliation measure, according to Brian Gardner, Washington’s chief policy analyst at the Bank. investments Stifel Nicolaus.
House Democrats are expected in the coming weeks to reintroduce a version of the Raise the Wage Act that was passed in the House two years ago but never gained traction in the Republican-controlled Senate.