The place efforts are made to lift the federal minimal wage
A restaurant worker at a “wage strike” demonstration organized by One Fair Wage in Washington, DC on May 26, 2021
Anna Money Maker | Getty Images News | Getty Images
The corona crisis has drawn new attention to wages and incomes.
It has been 12 years since the last federal minimum wage hike, and whether or not a minimum wage hike will go through Congress is still a question.
The state minimum wage is currently $ 7.25 an hour. This raise was approved by Congress in 2007, which gradually increased it to its current number in 2009.
This is a problem for many workers trying to make ends meet.
More from Personal Finance:
The minimum wage of $ 7.25 cannot pay all bills in any state
What Delaware’s move to a higher minimum wage could mean
Delta variant can be a reason to extend unemployment benefits
“The minimum wage is much lower than it peaked more than 50 years ago in 1968,” said Lawrence Mishel, a distinguished fellow at the Economic Policy Institute who tracks changes in the minimum wage.
The productivity and efficiency of workers have more than doubled, he said.
“Failure to raise the minimum wage has really undercut wages for the bottom third of the workforce,” Mishel said.
A fight to raise the federal minimum wage to $ 15 an hour earlier this year was unsuccessful.
One reason for this: This change was prohibited during the so-called reconciliation process. As a result, a move by some legislators to raise wages has not been taken into account.
While some Americans cry out for more stimulus checks, others ask: Why can’t we have a higher minimum wage instead?
Congress outlook uncertain
“It certainly stays on the Democratic agenda,” said Shai Akabas, director of economic policy at the bipartisan Policy Center, of efforts to raise the minimum wage on Capitol Hill.
It doesn’t look like a short-term goal, however, he said.
“It seems unlikely that this will happen in the next few months,” said Akabas.
One reason for this is that Democrats are talking again about pushing their next package through the reconciliation process. Therefore, a higher federal minimum wage would not be eligible for inclusion.
The Democrats didn’t get their minimum wage by law, but … $ 15 an hour signs are in business after the store window.
Washington Political Analyst with Raymond James
But while the fight for a higher federal minimum wage on Capitol Hill seems dead for the time being, it has ignited consumer demand that is causing wages to surge, said Ed Mills, Washington policy analyst at Raymond James.
“The Democrats did not legally get their minimum wage, but they created market conditions that are in many parts of this country with $ 15 an hour signs in business after the business window,” Mills said.
“Wages rose to $ 15 an hour faster than if they were required by law,” Mills said.
Some companies, states are moving towards higher wages
Some companies have made headlines with their hourly wage targets. These include Bank of America, which has announced it will raise its minimum wage to $ 25 an hour by 2025, and retailers like Amazon and Target, which have promised to pay their workers $ 15 an hour.
Meanwhile, the states are intervening to raise their minimum wage rates. Right now, however, none of them have an hourly wage of $ 15, although states like Florida are working to gradually move towards it by 2026.
According to Business for a Fair Minimum Wage, which advocates higher wages, only four states currently have minimum wages of $ 12.50 an hour. These include California, Massachusetts, New York, and Washington.
20 states now have wages no higher than the federal minimum wage of $ 7.25.
In particular, President Joe Biden has decided to raise the state minimum wage for state contractors to $ 15 an hour.
One problem with waiting for low hourly wages is rising inflation, according to Mishel.
“Inflation has already fallen well below the minimum wage,” he said.
One argument against increasing hourly wages is that it could be detrimental to businesses and employment. But there is little evidence to support these claims, Mishel said.
“There may be some companies that are closing, but others are opening too,” he said. “One might ask, if a company can only survive on below average wages, is that a good result?”