The US is nearer than ever to a minimal wage of $ 15 underneath the Biden presidency

Protesters urge McDonald’s Corporation to raise wages to a minimum of $ 15 and allow union formation on May 23, 2019 in Fort Lauderdale, Florida.

Joe Raedle / Getty Images

With Joe Biden’s inauguration as President of the United States, the country may be closer than ever to a minimum wage of $ 15.

In a speech last week, Biden outlined his US $ 1.9 trillion rescue plan that will help those hardest hit by the coronavirus pandemic. As part of the plan, Biden will ask Congress to raise the federal minimum wage from the current $ 7.25 to $ 15 an hour. The federal minimum wage has not increased since 2009.

While raising the federal minimum wage to $ 15 has been popular with some lawmakers, activists, and consumers, it is still meeting widespread opposition to the legislation.

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In 2019, the U.S. House of Representatives passed the Minimum Wage Increase Act, which would have gradually increased the hourly wage each year to $ 15 in 2025. However, then-Senate Majority Leader Mitch McConnell, R-Ky., Blocked him.

While Democrats now have a slim majority in both the House and Senate, it does not go without saying that Congress can pass them as proposed, and the $ 15 wage is a sticking point for a number of lawmakers.

“If the federal government mandates a universal minimum wage of $ 15, many low-income Americans will lose their current job and find fewer job opportunities in the future,” Senator Pat Toomey, R-Pa., Said in a statement Friday.

Can a minimum wage of $ 15 be achieved through reconciliation?

Democrats could potentially use the budget vote, a legislative tool, to pass the bill by simple majority and avoid a Republican filibuster. Elizabeth Warren, D-Mass., Appeared on Friday to refer to using reconciliation to pass a $ 15 minimum wage.

“If Republicans want to drag their feet while working families struggle, the Democratic majority should use every available legislative tool to get it passed,” she tweeted.

To be eligible for reconciliation in the Senate, policies must be budget bound and affect spending and income – they cannot be random. Democrats could possibly argue that a higher federal minimum wage has a direct budget impact, but it’s unclear whether this will work or if this is the path they’re going to take, said Sarah Binder, a political scientist at George Washington University and the Brookings Institution.

“There is an outside chance that you can do it through reconciliation, but what I think I am taking away from that is that you actually need a super-majority and Republican support to do it,” she said.

Democrats could decide to remove the $ 15 minimum wage rule from any bill they pass through reconciliation and seek to pass it on its own or with other laws. If they do, however, they’ll need all 50 Senate Democrats to agree on legislation and the votes of at least 10 Republican Senators, said Steven Smith, professor of political science at Washington University in St. Louis.

It’s unlikely, he said.

“The Senate Republicans are pretty conservative,” he said. “Once you’re past three or four of them, you probably can’t find any votes for it.”

The benefits and costs of the $ 15 minimum wage

Sarah Casillas | DigitalVision | Getty Images

Raising the federal minimum wage to $ 15 an hour over time would increase paychecks and reduce poverty. A recent study by the Congressional Budget Office found that raising the minimum wage to $ 15 by 2025 would raise paychecks for around 27 million American workers and lift 1.3 million out of poverty.

“That’s a pretty big part of the country for a better opportunity to spend or save,” said Mark Hamrick, senior economic analyst at Bankrate.

The same study also found that 1.3 million people could become unemployed due to the impact on businesses and that teenagers, part-time workers and those with only high school degrees would be disproportionately affected.

However, according to Ben Zipperer, an economist at the Economic Policy Institute, a left-wing research group, the CBO’s estimates of job losses are more negative than expected.

“The benefits of the policy far outweigh the potential costs,” he said.

The US population is broadly in favor of raising the minimum wage. A 2019 poll by the Pew Research Center found that two-thirds of Americans support an increase to $ 15 an hour. A number of states, including California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, and New York, have already passed laws to raise the local minimum wage to $ 15.

Florida was the youngest state to pass a law increasing its minimum wage to $ 15 during the November election.

The impact on wallets

A higher minimum wage could help millions of Americans struggle with their finances and improve the playing field for those who earn the least, especially during the coronavirus pandemic, which was toughest for the most vulnerable.

“Unfortunately, in our society we women and people of color pay disproportionately low wages,” said Zipperer. “An increase in the minimum wage in the future would bring about the biggest wage increases for women and people of color.”

An increase in the federal minimum wage would help 25% of black and 19.1% of Hispanic workers, according to an EPI analysis of the law to increase the minimum wage. In comparison, 13.1% of white workers and 10.8% of Asian workers would be affected.

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