$15 Federal Minimum Wage
Text Version
What it is
The federal minimum wage is the lowest allowed wage in the country. Since 2009, it has been set at $7.25 per hour. However, this currently does not apply to workers like full-time students, workers with disabilities, and those who do not receive tips. Due to economic woes like income inequality and poverty, some have argued for increasing the federal minimum wage to $15. Some states have already enacted laws that do so gradually, including New Jersey, California, Connecticut, Illinois, Maryland, Florida, and Massachusetts. Recently, the House of Representatives passed a similar law in 2019, but this has stalled in the Senate.
The case for it
Advocates argue that a $15 federal minimum wage would increase economic activity and create jobs due to higher consumer spending. They also claim that this would also decrease wealth and income inequality by increasing the pay of between 17-27 million workers in 2025. Advocates also emphasize this policy’s disproportionate benefit for minorities and women, who tend to earn less. Finally, some note that the federal minimum wage has not kept pace with rises in productivity, and that it lost 8.1% of its purchasing power since 2015 due to lack of adjustment for inflation.
The case against it
Critics argue that higher labor costs from a $15 federal minimum wage would cause employers to layoff workers and hire less. They cite studies finding that this policy would make entry-level jobs too competitive. Thus, they claim this wage would disproportionately raise the unemployment rate for those with low incomes, stifling upward mobility and worsening poverty. Some argue that this policy could also force small businesses to raise prices, driving away consumers. Others claim this does not help the unemployed or those earning just over the minimum wage.
Sources
The Balance Career: "2020 Federal and State Minimum Wage Rates"
U.S. Department of Labor: "Minimum Wage"
NBC: "House passes $15 minimum wage bill"
National Conference of State Legislatures: "State Minimum Wages | 2020 Minimum Wage by State"
ProCon.org: "Minimum Wage - Pros & Cons"
Economic Policy Institute: "Why America Needs a $15 Minimum Wage"
The Hill: "A $15 minimum wage is exactly what our economy needs"
New York Times: "$15 Minimum Wage Would Reduce Poverty but Cost Jobs, Congress Told in Report"
Congressional Budget Office: "The Effects on Employment and Family Income of Increasing the Federal Minimum Wage"
Forbes: "The Unintended Consequences Of Raising Minimum Wage To $15"
Salary.com: "Addressing Problems with Minimum Wage"
The Guardian: "What a $15 minimum wage means for US small businesses"
Click here to view the full Research Outline!
The federal minimum wage is the lowest allowed wage in the country. Since 2009, it has been set at $7.25 per hour. However, this currently does not apply to workers like full-time students, workers with disabilities, and those who do not receive tips. Due to economic woes like income inequality and poverty, some have argued for increasing the federal minimum wage to $15. Some states have already enacted laws that do so gradually, including New Jersey, California, Connecticut, Illinois, Maryland, Florida, and Massachusetts. Recently, the House of Representatives passed a similar law in 2019, but this has stalled in the Senate.
The case for it
Advocates argue that a $15 federal minimum wage would increase economic activity and create jobs due to higher consumer spending. They also claim that this would also decrease wealth and income inequality by increasing the pay of between 17-27 million workers in 2025. Advocates also emphasize this policy’s disproportionate benefit for minorities and women, who tend to earn less. Finally, some note that the federal minimum wage has not kept pace with rises in productivity, and that it lost 8.1% of its purchasing power since 2015 due to lack of adjustment for inflation.
The case against it
Critics argue that higher labor costs from a $15 federal minimum wage would cause employers to layoff workers and hire less. They cite studies finding that this policy would make entry-level jobs too competitive. Thus, they claim this wage would disproportionately raise the unemployment rate for those with low incomes, stifling upward mobility and worsening poverty. Some argue that this policy could also force small businesses to raise prices, driving away consumers. Others claim this does not help the unemployed or those earning just over the minimum wage.
Sources
The Balance Career: "2020 Federal and State Minimum Wage Rates"
U.S. Department of Labor: "Minimum Wage"
NBC: "House passes $15 minimum wage bill"
National Conference of State Legislatures: "State Minimum Wages | 2020 Minimum Wage by State"
ProCon.org: "Minimum Wage - Pros & Cons"
Economic Policy Institute: "Why America Needs a $15 Minimum Wage"
The Hill: "A $15 minimum wage is exactly what our economy needs"
New York Times: "$15 Minimum Wage Would Reduce Poverty but Cost Jobs, Congress Told in Report"
Congressional Budget Office: "The Effects on Employment and Family Income of Increasing the Federal Minimum Wage"
Forbes: "The Unintended Consequences Of Raising Minimum Wage To $15"
Salary.com: "Addressing Problems with Minimum Wage"
The Guardian: "What a $15 minimum wage means for US small businesses"
Click here to view the full Research Outline!