Democrats revive proposal to double federal minimum wage
In less than two weeks, the newly installed Biden/Harris administration, in tandem with Democratic majorities in both chambers of Congress, has introduced a flurry of executive and legislative changes that reflect the differences in priority and political ideology between the the prior Republican administration and this current Democratic one. Congress' revival of the 2019 Raise The Wage Act is a testament to the stark contrasts and defining lines that continue to divide political parties and the nation.
The proposed legislation would not immediately double the current minimum wage, however. Instead, the pay floor would grow gradually until 2025. The plan would cap minimum wage growth at $9.50 an hour for 2021. That number would rise to $11 for 2022. The following year's increase would bring the minimum wage to $12.50 per hour and go up to $14 in 2024. The rate would finally settle at $15 per hour, nationally, in 2025. After 2025, increases would be calculated according to median wage growth.
Additionally, the legislation ensures that servers, valets, and other workers who rely on tips, will no longer be subjected to below minimum wage pay. Since 1996, the pay floor for tip workers has been $2.13 an hour. The bill also ends sub-$7.25 an hour pay for qualifying teenage worker and individuals with disabilities.
Democrats have been long-time advocates for a federal minimum wage increase. President Joe Biden has officially endorsed the federal minimum wage increase as part of his White House agenda. And during last year's nationwide rush of protests against wage inequality, Vice President Kamala Harris joined Las Vegas McDonald's employees and other protesters demanding a $15 per hour wage.
By contrast, Republican lawmakers have largely argued against the measure, often citing a report from the non-partisan Congressional Budget Office that warns massive job losses resulting from the proposed wage increase. When the Raise the Wage Act was originally introduced in 2019, the legislation passed the Democrat-led House of Representatives on a vote of 231-199. That the bill was dead-on-arrival in the Senate came as a surprise to no one — the Senate Committee on Health, Education, Labor, and Pensions refused to even place the bill on its schedule.
In an effort to bridge the partisan gap following the failure of the Raise the Wage Act, Congresswoman Terri Sewell (D-AL) introduced legislation that designated minimum wage levels based on a business' region. For instance, under Sewell's bill, New York and Chicago would be required to meet a higher minimum wage standard than Birmingham or Knoxville. Wages would be updated every three years and state and local governments would maintain the ability to supercede federal minimum wage mandates based on local economic conditions. “The wage floor must be raised, but it must be done it in a way that makes sense for each local economy,” said Sewell at the time.
Although neither 2019 effort passed, the 2021 iteration of the Raise the Wage Act appears to have a significantly better chance at changing the country's pay structure for wage workers. With Democrats controlling both chambers of Congress as well as the White House, the prospects for passage of a new minimum wage shows some promise, but the path to law is no sure bet.
Vermont Senator Bernie Sanders, the incoming Senate Budget Committee Chairman, has expressed doubt that the legislation will pass the without the support of Senate Republicans and favors budget reconciliation as the most viable approach to raising the minimum wage and circumventing conservative objections.
“It clearly has to be done by reconciliation. That’s something I’m working very hard on,” said Sanders in an interview with The Guardian.
According to the Economic Policy Institute (EPI), "since its historical peak in February 1968, the federal minimum wage has lost 31 percent in purchasing power—meaning that full-time, year-round minimum wage workers today have annual earnings worth $6,800 less than what their counterparts earned five decades ago."
The federal minimum wage has not budged since 2009 when it was raised to $7.35 an hour, up from $6.55 in 2008. From 1997 to mid-2007, the hourly minimum wage was $5.15. That figure rose to $5.85 in late 2007.
The National Conference of State Legislatures reports that 29 states and D.C. have minimum wages above the federal minimum wage of $7.25 per hour. At the other end of the spectrum are states without any minimum wages laws whatsoever: Alabama, Louisiana, Mississippi, South Carolina, and Tennessee. Georgia and Wyoming, have a minimum wage below $7.25 per hour.