With all the talk about President Biden’s push to raise the minimum wage to $15 an hour I thought now would be fitting to answer the question, “What does $15 an hour mean?” The current federal minimum wage is $7.25 an hour and has not been raised in over 10 years. 29 states and D.C. have a minimum wage higher than the federal minimum wage including California, Florida, Maine, Maryland, Massachusetts, New Jersey, New York, and Washington D.C. Pennsylvania’s minimum is $7.25 per hour. According to the U.S. Census Bureau, 12% of PA’s population is living in poverty, meaning that of PA’s 12.8 million population, 1.5 million are in poverty. An increase in the minimum wage would help Pennsylvanians, as well as the whole country.
The Bill
There was a bill introduced in the Senate called the “Raise the Wage Act of 2021”. You can see the specific bill here. The Raise the Wage Act of 2021, if passed, will gradually raise the federal minimum wage to $15 an hour by 2025. As part of the bill, the federal minimum wage will increase to $9.50 this year and will keep increasing until it reaches $15 an hour in 2025. This bill will also phase out the subminimum wage of $2.13 an hour that tipped workers get paid which hasn’t changed since 1991.
A Bigger Picture
This increase to the minimum wage would, when it reaches $15, lift pay for 32 million workers, which is 21% of the U.S. workforce. In all areas across the United States, a single adult without children needs a salary of at least $31,200, which is what a full-time worker making $15 an hour would make. This amount is just what someone needs for a modest but adequate standard of living.
With inflation and increased standards of living, the minimum wage may go up even more in the next couple of years. The numbers I gave you are just for a single adult with no children, so you can imagine how difficult it can be for single parents and families with many dependants.
The Other Side of the Argument
It is only fair to see the downsides of this bill. If the bill is passed, the cumulative budget deficit would increase over the coming years. This increase is estimated to be around $54 billion, but that’s just an estimate. Another predicted downside is higher prices for goods and services, but this is a natural consequence of increasing the minimum wage. A general increase in federal spending would be a downside as well, but this will hopefully be handled in the near future.
Conclusion
It’s interesting to see this bill being set in motion and I can only imagine where it can go from here. If this bill becomes law many people will feel the effects of it and it can help so many people. This is an issue people have been fighting for a long time and it's nice to see some action being taken on it.