The federal minimum wage has been raised to $15 an hour and will gradually phase in over the next few years. The increase was included in the $1.9 trillion COVID-19 relief package signed into law by President Joe Biden on March 11, 2021. The Fight for $15 campaign, which started in 2012, called for a $15 hourly minimum wage and gained support from politicians, labor unions, and civil rights groups. The hike has several potential benefits and challenges, including reducing poverty, inequality, and public dependence while increasing labor costs, reducing profitability, and decreasing competitiveness for some businesses. Workers’ rights advocates argue that more work must be done to ensure worker well-being and empowerment.

Minimum Wage Hike Passed: Workers Celebrate Clearing $15 an Hour

The federal minimum wage has finally been raised to $15 an hour after years of struggle and negotiations between workers’ rights advocates and lawmakers, bringing relief to millions of low-wage workers across the country. The hike was included in the $1.9 trillion COVID-19 relief package, commonly referred to as the American Rescue Plan, which was signed into law by President Joe Biden on March 11th, 2021. The increase will gradually phase in over the next few years, with the first increment taking effect on July 24, 2021.

The Fight for $15 Campaign

The Fight for $15 campaign started in November 2012, when fast-food workers in New York City went on strike, calling for a $15 hourly minimum wage and the right to unionize without retaliation. The movement quickly spread to other cities and sectors, including retail, homecare, and airport workers, and gained the support of prominent politicians, labor unions, and civil rights groups. The campaign argued that the current federal minimum wage of $7.25 per hour, which hasn’t been raised since 2009, was not enough to afford basic necessities like food, housing, healthcare, and transportation, and that workers deserve a fair share of the wealth they helped create for their employers. Moreover, most low-wage workers are women, people of color, immigrants, and young adults, who are disproportionately affected by poverty, wage theft, discrimination, and insecure employment.

The Benefits and Challenges of the Minimum Wage Hike

The minimum wage hike has several potential benefits and challenges for workers, businesses, and the economy as a whole. On the one hand, it would boost the income and purchasing power of millions of low-wage workers, reducing poverty, inequality, and the reliance on public assistance programs. According to the Economic Policy Institute, raising the federal minimum wage to $15 by 2025 would lift the wages of 32 million workers, or one-fifth of the U.S. workforce, and increase their total earnings by $107 billion per year. It would also stimulate job creation and consumer demand, as workers would have more disposable income to spend on goods and services. Moreover, it would save lives and prevent illnesses, as low-wage workers are more likely to work in hazardous conditions or without adequate health insurance, as COVID-19 has highlighted.

On the other hand, the minimum wage hike could also lead to some challenges and trade-offs, particularly for small businesses, rural areas, and low-productivity sectors. Small businesses, in particular, may face higher labor costs, reduced profitability, and decreased competitiveness, especially if they operate in tight profit margins or compete with bigger corporations. Rural areas, where the cost of living and the productivity levels are lower, may struggle to attract or retain businesses that can afford to pay higher wages. Low-productivity sectors, such as agriculture, hospitality, and homecare, may also see higher turnover rates, automation, or outsourcing if employers cannot afford to pay the new minimum wage or pass the costs onto their customers.

The Next Steps and Future Challenges

Despite the passage of the minimum wage hike, workers’ rights advocates argue that there is still much work to be done to ensure that all workers can thrive in a fair and just economy. For instance, the minimum wage hike still falls short of the living wage, which is the minimum income required to meet basic needs and maintain a decent standard of living, as defined by local living wage calculators and indexes. The living wage varies depending on the geographic location, family size, and job occupation, but it typically ranges between $15 and $30 per hour, according to the MIT Living Wage calculator. Moreover, the minimum wage hike does not address other issues such as paid sick leave, fair scheduling, worker safety, and collective bargaining rights, which are crucial for worker well-being and empowerment. Finally, the minimum wage hike may face legal challenges, political opposition, or non-compliance by some employers or states, as has happened in the past.

FAQs

What is the current federal minimum wage?

The current federal minimum wage is $7.25 per hour, which was established in 2009.

What is the new federal minimum wage?

The new federal minimum wage is $15 per hour, which will be phased in over the next few years.

When will the new minimum wage take effect?

The first increment of the new minimum wage will take effect on July 24, 2021, increasing the minimum wage to $9.50 per hour.

Who will benefit from the minimum wage hike?

The minimum wage hike will benefit millions of low-wage workers, including fast-food, retail, homecare, and airport workers, among others.

What are the potential benefits and challenges of the minimum wage hike?

The potential benefits of the minimum wage hike include reducing poverty, inequality, and public dependence; stimulating job creation and consumer demand, and improving workers’ health and safety. The potential challenges include higher labor costs, reduced profitability, and decreased competitiveness for some businesses, as well as higher turnover rates, automation, or outsourcing for some sectors.

What is the living wage, and how does it differ from the minimum wage?

The living wage is the minimum income required to meet basic needs and maintain a decent standard of living, as defined by local living wage calculators and indexes. The living wage varies depending on the geographic location, family size, and job occupation, but it typically ranges between $15 and $30 per hour, according to the MIT Living Wage calculator. The living wage takes into account the real cost of living, while the minimum wage is the legal minimum that employers must pay their workers.

What other issues affect worker well-being and empowerment besides the minimum wage?

Other issues that affect worker well-being and empowerment include paid sick leave, fair scheduling, worker safety, and collective bargaining rights. These issues can help workers balance work and family responsibilities, reduce stress and health risks, and negotiate better pay and benefits with their employers.

What are the future challenges for workers’ rights advocates after the minimum wage hike?

The future challenges for workers’ rights advocates after the minimum wage hike include advocating for the living wage, addressing other labor issues, such as paid sick leave and worker safety, and ensuring compliance and enforcement of the new minimum wage by employers and states.