“A $15 minimum wage is not a radical idea,” said Vermont Sen. Bernie Sanders on Twitter recently. “What’s radical is the fact that millions of Americans are forced to work for starvation wages, while 650 billionaires became over $1 trillion richer 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.
What is the current minimum wage?
The federally mandated wage floor is $7.25 per hour.
But the minimum wage is actually different around 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, DC.
There’s also a big exception to the minimum wage for workers who make 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 ballot measures — it has been more than a decade since the federal minimum wage was last raised in 2009.
That 12 year gap is the longest American workers have ever gone without a bump.
The minimum wage was first enacted in 1938 at 25 cents an hour.
How far does that $7.25 go?
When was the minimum wage highest?
In terms of inflation and purchasing power, the $1.60 minimum wage in 1968 would be worth about $12.27 in 2021 dollars.
How high do Democrats want to raise the minimum wage?
Sanders wants to raise the minimum wage incrementally — by $1 or $1.50 each year — until it reaches $15 per hour in 2025.
But this next part is important. Rather than rely on Congress to agree on raising the minimum wage again in 10 years or so, a bill introduced by Sanders would require it to be raised each year by the Department of Labor based on Bureau of Labor Statistics data.
How many people make the federal minimum wage?
Because so many states have their own, higher minimum wage, relatively few American workers make the federal minimum wage.
According to BLS surveys, about 392,000 workers earned the minimum wage of $7.25 in 2019 and 1.2 million workers were paid a wage below the federal minimum. They represent 1.9% of the 82.3 million American workers paid by the hour.
But almost all workers make less than $15, which is the minimum in only a few places.
How much of the country has imposed a minimum wage higher than the federal floor?
What do we know about people making minimum wage?
The top industry for people making minimum wage is the service industry, particularly food service.
The states with the largest 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 workers paid by the hour make minimum wage.
Can you live on the minimum wage?
An individual working 40 hours a week and making the federal minimum wage would make $15,080.
The poverty level seems impossibly low.
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 proposed $15 minimum wage.
What would be the effect of raising the minimum wage on businesses?
Many business owners and some economists argue that raising the federal minimum wage hurts businesses and costs people jobs, particularly in parts of the country with lower cost of living.
What would be the effect of raising the minimum wage on low-wage earners?
What does corporate America say about raising the minimum wage?
Which lawmakers are key to this debate?
Democrats want to use something called “budget reconciliation” to pass their Covid relief bill because it allows them to maneuver around the filibuster and pass the measure with a simple majority instead of a 60-vote supermajority.
But they’ll need a friendly ruling by the Senate parliamentarian that the wage hike is germane (this is not guaranteed) and also the vote of every Democratic senator (two are opposed).
Which Democrats oppose raising the minimum wage?
Democratic Sen. Kyrsten Sinema of Arizona has said she won’t support the bill because in her view it is not related to the pandemic.