Back in July 2009, as the nation was emerging from the depths of the Great Recession, the federal minimum wage increased by 70 cents to $7.25 per hour. Today, there it sits, unchanged 12 years later. Initially included in President Joe Biden’s $1.9 trillion coronavirus relief plan was a proposal to increase the minimum wage to $15 by 2025. Although it was stripped from the coronavirus relief bill yesterday, with Congress deciding to delay any increase in the minimum wage until after the pandemic subsides, advocates are pressing on with their campaign to raise the wage floor afterward.
A bill to raise the minimum wage has already been introduced by Representative Robert C. “Bobby” Scott (D-VA) and Senator Bernie Sanders (I-VT). Their bill, called the Raise The Wage Act (HR 603), would, if enacted, affect the lives of millions of low-wage workers. With an immediate increase to $9.50 an hour, minimum wages would be stepped up over the next four years. After that, the level would be indexed to the median wage for all workers. The bill also calls for removing the exceptions that have allowed employers to pay tipped workers, those with disabilities, and workers younger than 20 significantly below the minimum standard.
According to an analysis done by the Economic Policy Institute (EPI), passing this bill would benefit millions. Across the country, they found that almost 32 million workers, or 21 percent of all workers, would see their earnings grow. And that growth would be significant, totaling $107 billion annually, with the average worker’s yearly increase coming in at $3,300.
Former Speaker of the House Tip O’Neill was said to have observed that “all politics are local,” and so would be the impact of a minimum wage increase. Because federal law sets a level all employers must meet but does not forbid states from setting their standards higher, 29 states along with the District of Columbia, Guam, and the US Virgin Islands have taken action while the federal government stood still, setting minimum wage standards that vary from $8.75 in West Virginia to $15 in our nation’s capital.
The state of Illinois has already agreed to raise its minimum wage to $15 in 2025, so whether the federal government acts or not will make little difference. Across the state’s workforce, EPI’s analysis indicates that between two and five percent of their workers would directly benefit from federal action. But, just across the border in Indiana, which has not yet chosen to go above the federal wage floor, as many as 36 percent of all workers would be taking home higher paychecks.
But as EPI reminds us, not all workers are the same; Raising the wages of all workers will help those who have most ignored most:
Low wages…are particularly harmful to Black workers and other workers of color, especially women of color, who make up a disproportionate share of workers who are severely underpaid. This is the result of structural racism and sexism, with an economic system rooted in chattel slavery in which workers of color—and especially women of color—have been and continue to be shunted into the most underpaid jobs.
Setting a national $15 standard will not totally redress historic inequities, but it would result in dramatic improvements. By 2025, “nearly one-third (31 percent) of African Americans and one-quarter (26 percent) of [Latinx] workers” are likely to have benefitted. Sixty percent of those benefiting from this federal action would be women.
If Congress acts, frontline workers—those that many have called heroes over the months we have been combatting the pandemic—will also be helped significantly. According to EPI’s analysis, among the beneficiaries would be:
- “More than one-third (35 percent) of those working in residential or nursing care facilities…”
- “One in three retail-sector workers (36 percent) would get a raise, including 42 percent of workers in grocery stores…”
- “More than four in 10 (43 percent of) janitors, housekeepers, and other cleaning workers would benefit…”
- “Nearly two-thirds (64 percent) of servers, cooks, and other food preparation workers would see their earnings rise by $5,800 on a year-round basis.”
The data make a strong case for acting now and making a new minimum wage part of our economic response to COVID-19. A study conducted by economists Anna Godøy and Michael Reich, published two years ago by UC Berkeley’s