President-elect Joe Biden’s proposal to more than double the federal minimum wage will provide an urgent increase to millions of low-income workers and help stem the inequality in the U.S., economists and labor advocates said.
In details of his $ 1.9 billion COVID-19 an emergency proposal on Thursday, Mr. Asked to increase the minimum wage to at least $ 15 an hour, Biden said: “No one who works 40 hours a week should still be below the poverty line.”
A fatter salary could help many Americans regain their financial position during the ongoing recovery, including ‘essential’ workers such as groceries and medical assistants at their homes, whose jobs have put them in the front lines of a pandemic, yet with the lowest earnings.
“A minimum wage of $ 15 must be paid per worker, and essential front-line workers must pay for the enormous health and safety risks they face during this pandemic,” said Marc Perrone, international president of United Food and Commercial Workers, told CBS MoneyWatch. in a statement. The union represents 1.3 million retail, grocery and other workers.
The incoming Biden government’s plans to raise salaries also reflect a dramatically shifting political landscape – one that could eventually bear fruit for low-paid workers and grassroots activists who have campaigned for better wages and working conditions for years as part of the influential Fight for $ 15 Campaign.
The success of the labor movement can be seen in increases in minimum wages in 20 states this year, with four more states and Washington, DC, which will also increase their baseline. pay later this year. In Florida, meanwhile, voters narrowly approved in December a measure to increase the state’s minimum wage by 2026 to $ 15 per hour.
Same federal wage since 2009
The federal minimum wage, currently $ 7.25 per hour, has not started since 2009, the longest period without an increase since it was passed in 1938. According to the U.S. Department of Labor, as of 2019 (the most recent year for which data is available)), 392,000 U.S. workers earn $ 7.25 per hour; another 1.2 million earn even less (workers with a fee are among those exempted from the $ 7.25 minimum).
Generally, about 2% of all U.S. employees paid hourly earn $ 7.25 or less. If the national minimum is raised to $ 15 an hour by 2025, it will be 1.3 million workers higher than the wages they place below the poverty line, according to the non-partisan Congress budget side.
The CBO also estimates that the move would cost 1.3 million U.S. jobs, a claim long put forward by conservative economists. The call from mr. Praying to raise the minimum wage to $ 15 an hour is the absolute last thing unemployed workers currently need, “said Michael Farren, an economist with the law school Mercatus Center at George Mason University, in an e- “After all, they can not benefit from higher wages if the higher wages result in slower growth in employment.”
Heidi Shierholz, senior economist and director of policy at the left-wing Economic Policy Institute, rejects the argument that a wage increase will lead to job losses.
“The claim of job loss is not supported by evidence – it’s probably an overestimation of the negative impact on employment. But even if you accept the findings, they still find that the benefits far outweigh the costs,” he said. Shierholz, formerly the chief economist of the Labor Department under Barack Obama, told CBS MoneyWatch.
Higher labor costs by raising the minimum wage will be covered by businesses, some of which, according to the CBO, will pass it on to consumers.
“The loss of operating income will mostly be borne by families far above the poverty line. All consumers will pay higher prices, but families with higher incomes who spend more will pay more of these costs,” the CBO said in a statement. report of 2019 declared. .
“There is no doubt that it will 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 economic gender justice. We know that women and men of color are likely to be at the low end of the pay scale.”
Although working groups mr. Biden’s pursuit of higher wages applauded the political path of the proposal. Democrats can try to get the broader assistance plan from Mr. Pray under the rules of budget reconciliation by passing on what is required by the Senate’s 60 votes.
But non-budget-related items are banned from reconciliation, meaning items such as a minimum wage increase cannot be included in a conciliation measure, according to Brian Gardner, Washington policy analyst at investment bank Stifel Nicolaus.
Democrats in the House are expected to reinstate in the coming weeks a version of the ‘Raise the Wage Act’ that was passed in the House two years ago, but never got traction in the Republican-controlled Senate.