What are the consequences of increasing the minimum wage?
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(CNN) -
House Democrats have included a $ 15 minimum wage increase in their latest covid relief bill, though opposition among some Senate Democrats means it's not entirely clear that they will. the votes to approve it.
Improving workers' wages is unrelated, as raising the minimum wage has long been a Democratic priority.
It is entirely related to the fact that the pandemic economy has hurt low-wage workers, for example those who work in food service, childcare and home health care, who cannot work from home, more than people who can do their jobs from home.
The argument about income inequality, which is growing in the United States, is central to the widespread effort to raise the minimum wage.
"A $ 15 minimum wage is not a radical idea," Vermont Senator Bernie Sanders recently said on Twitter.
What is radical is the fact that millions of Americans are forced to work for starvation wages, while 650 billionaires enriched themselves by more than a trillion dollars during a global pandemic.
Yes. We must raise the minimum wage to a living wage.
Here's what you need to know to understand the debate.
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This is how the increase in the minimum wage would impact 4:31
What is the current minimum wage?
The minimum wage required by the federal government is $ 7.25 per hour.
But the minimum wage is actually different across the country.
Some states have a much higher minimum wage than others, and some cities are even higher than the rest of their states.
The highest minimum wage is $ 15 in Washington.
There is also a large exception to the minimum wage for workers who charge tips, such as waiters.
The federal minimum for those workers is just $ 2.13 an hour.
When was the last time the minimum wage changed?
While states and cities have recently raised their own minimum wages, in some places, after voters approved the measures on the ballot, more than a decade has passed since the federal minimum wage was last raised in 2009.
That 12-year gap is the longest time American workers have gone without a raise.
The minimum wage was first enacted in 1938 at $ 25 cents an hour.
How far does that $ 7.25 go?
Not as far as it got in 2009!
Due to inflation, you would need $ 8.81 an hour in 2021 dollars to equal $ 7.25 in 2009. In that sense, the federal minimum wage has dropped.
When was the highest minimum wage?
In terms of inflation and purchasing power, the minimum wage of US $ 1.60 in 1968 would be worth about US $ 12.27 in 2021 dollars.
The ins and outs of the federal minimum wage increase 1:04
How high do Democrats want to raise the minimum wage?
Sanders wants to increase the minimum wage incrementally, by $ 1 or $ 1.50 each year, until it reaches $ 15 an hour in 2025.
But the next part is important.
Rather than relying on Congress to agree to raise the minimum wage again in about 10 years, a bill introduced by Sanders would require the Department of Labor to raise it every year based on data from the Bureau of Labor Statistics.
How many people earn the federal minimum wage?
Because many states have their own higher minimum wage, relatively few American workers earn the federal minimum wage.
According to BLS surveys, around 392,000 workers earned the minimum wage of $ 7.25 in 2019 and 1.2 million workers received wages below the federal minimum.
They represent 1.9% of the 82.3 million American hourly workers.
But almost all workers earn less than $ 15, which is the minimum in only a few places.
What part of the country has imposed a higher minimum wage than the federal floor?
More than half of the states - 29 - have a minimum wage above $ 7.25, and 45 cities have a higher minimum wage than their state, according to the Institute for Economic Policy.
A large portion of the states with a minimum wage above $ 7.25 automatically increase it with inflation.
The salary went up in 20 states on January 1.
California has the highest state minimum wage of $ 14 per hour for businesses employing 26 or more people, but San Francisco and other cities in the state have higher wages, as does New York.
Seattle and others.
20 states increase their minimum wage in the US 1:04
What do we know about people who earn the minimum wage?
Again, according to BLS, they are mostly young and less likely to have more than a high school education, if any.
They are more likely to work part time than full time.
A higher proportion are women than men and are less likely to marry.
The main industry for people who earn minimum wage is the service industry, particularly food service.
The states with the highest proportion of minimum wage workers are in the south: Louisiana, Mississippi and South Carolina, according to BLS.
In the vast majority of states, less than 5% of hourly workers earn the minimum wage.
Can you live on the minimum wage?
A person who works 40 hours a week and earns the federal minimum wage would earn $ 15,080.
The federal poverty level in 2021 is $ 12,880.
Therefore, a single person who works full time and earns a minimum wage is technically above the poverty level.
However, if the person has a dependent and earns the minimum wage, they fall below the federal poverty level of $ 17,420.
The level of poverty seems incredibly low.
There are criticisms of the level of poverty as a measure, since it does not take into account the cost of living in different places.
MIT professor Amy Glasmeier has developed a "living wage" calculator, which varies by state, county and city.
It also takes into consideration different family scenarios, such as one adult with one or more children and two adults with one or both working, and is invariably higher than even the $ 15 minimum wage.
What would be the effect of increasing the minimum wage in companies?
Many business owners and some economists argue that raising the federal minimum wage hurts businesses and costs people jobs, particularly in lower cost-of-living parts of the country.
“Large cities with high costs of living, many of which already have or are on the way to a minimum wage of US $ 15, may not experience great consequences.
But non-urban areas and places with lower costs of living could be devastated, ”wrote Rachel Greszler, researcher at the Heritage Foundation.
What would be the effect of raising the minimum wage on people who receive low wages?
The nonpartisan Congressional Budget Office predicted that the incremental wage increase to $ 15 would raise workers' wages by $ 333 billion for 17 million workers whose wages are at or below the minimum and could also affect 10 million workers whose salary is slightly higher.
Almost a million people would be drawn above the poverty level and the government would spend less money on food assistance programs.
For an in-depth look at the benefits of raising the minimum wage, here is a report from the Institute for Economic Policy, pushing for a wage increase.
(In English)
For the argument that raising wages costs American jobs, here is a report from the National Bureau of Economic Research.
(In English).
What are American companies saying about raising the minimum wage?
Several massive companies, Amazon and Target, under public pressure from activists, have pledged their own $ 15 minimum wage. Walmart has raised wages well above the $ 7.25 floor, but it doesn't pay automatically. to all his employees $ 15 per hour, although he argues that with benefits, his employees are compensated above that level.
Which legislators are key to this debate?
Democrats want to use something called "budget reconciliation" to pass their covid aid bill because it allows them to maneuver around obstructionism and pass the measure with a simple majority rather than a supermajority of 60 votes.
But they will need an amicable decision from the Senate MP that the salary increase is relevant (this is not guaranteed) and also the vote of all Democratic senators (two oppose).
What Democrats are opposed to raising the minimum wage?
Democratic Sen. Kyrsten Sinema of Arizona has said she will not support the bill because, in her opinion, it is not related to the pandemic.
“The important thing is whether or not it is directly related to short-term COVID relief.
And if he is not, then I am not going to support him in this legislation, ”Sinema told Politico.
“The minimum wage provision is not appropriate for the conciliation process.
It is not a budget item.
And it shouldn't be there.
Interestingly, Arizona has already raised its minimum wage to one of the highest state minimum wages in the country, at more than $ 12. Like the Democrats' national proposal, it is tied to the cost of living and rises with inflation.
West Virginia Sen. Joe Manchin, another moderate Democrat, also opposes the use of reconciliation to pass the measure.
He sees a salary of $ 11 as more appropriate for West Virginia, where the state minimum wage has been set at $ 8.75 since 2016.
Minimum salary
