Labor advocates have been fighting for years to increase the U.S. federal minimum wage, and they might finally succeed. The current federal minimum wage is $7.25 an hour (although the minimum wage for workers who collect tips is only $2.13). The federal minimum wage has not increased since 2009, but President Biden and Congressional Democrats are introducing legislation to raise it to $15. Here’s what you need to know.
Where Does the $15 Minimum Wage Stand Now?
There are several concurrent efforts in Washington to increase the federal minimum wage, including an executive order, a new bill in Congress, and President Biden’s stimulus proposal.
Biden signed an executive order last week to start the process for federal workers and contractors to all earn $15 or more, one of about three dozen orders he signed in his first week to roll back the actions of the Trump administration.
Raising the minimum wage to $15 is also included in Biden’s stimulus proposal, which lawmakers are beginning to debate. Democrats hope to pass the bill as soon as next week, without or without Republican support. The minimum wage proposal may or may not remain in the final bill, however.
At the same time, Democrats introduced a separate, new bill called the Raise the Wage Act to raise the minimum wage to $15 and eventually eliminate “tipped wages”—lower minimum wage requirements for those workers who receive tips. Democrats are hopeful they may be able to circumvent fierce Republican opposition to increased wages through a process called budget reconciliation. Budget Reconciliation expedites the Congressional process and prohibits filibuster for certain budget-related bills. It’s designed to force Congress to pass budget changes quickly when they’re needed, but it’s not entirely clear if the minimum wage rule meets the reconciliation requirements.
Would the Minimum Wage Raise Right Away?
Even if the minimum wage change passes now, wages won’t increase right away. The minimum wage increases would take place gradually, over years, to eventually reach $15 by 2025. The first increase would be up to $9.50 this year, and continue from there. This gradual change would help alleviate pressure on small businesses and allow them time to adjust.
How Many Workers Would See Increased Wages?
Although the minimum wage in many states is higher than the federal minimum wage, increasing the federal minimum wage would still have a dramatic impact on workers’ take home pay. Nearly 32 million workers would get a raise, including ⅓ of black workers and ¼ of Latino workers.
A $15 minimum raise will raise impacted workers’ pay by about $3300 per year. It is also expected to raise about 1.3 million workers out of poverty. The wage increase could impact other issues as well, including reducing childhood mortality, according to Syracuse University.
Is Anyone Opposed to the Increase?
Not everyone is excited about higher wages. The proposal faces steep opposition from industry advocates in retail, restaurants, and hospitality, as well as some small business groups.
Some business advocates are concerned that the increase could force even more small businesses to close. Higher wages will also likely cost some jobs—according to the Congressional Budget Office, up to 1.3 million—although far fewer people would lose work than would see higher pay.
Perhaps most importantly, many Republicans are deeply opposed to the increase. Although Democrats now control both houses of Congress, Republicans may still seek to block the change through filibuster if the reconciliation process isn’t approved.
It’s likely the minimum wage is likely to increase by some amount soon, but exactly how much and when is still to be determined. We will keep you updated and in the meantime, download the Skip app to get the latest news on what’s happening with the U.S. government. Consider becoming a Skip Plus member for access to exclusive content, including funding opportunities and services just for members.
