Activists reveal in assist of a $15-per-hour minimal wage and suggestions for restaurant employees in Washington, D.C. on Feb. 8, 2022.
Mandel Ngan | AFP | Getty Pictures
The federal minimal wage just lately marked a brand new anniversary. However for affected employees, that might not be one thing to rejoice.
The federal minimal wage has now been caught at $7.25 per hour for 15 years.
On the marketing campaign path, Democratic presidential nominee Kamala Harris just lately recommended that ought to change.
“When I am president, we will continue our fight for working families of America, including to raise the minimum wage and eliminate taxes on tips for service and hospitality workers,” Harris stated at an Aug. 10 Nevada marketing campaign occasion.
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Many states have enacted minimal hourly pay charges which can be larger than the federal minimal wage. But 20 states have wages which can be no larger than the federal stage, in line with Enterprise for a Honest Minimal Wage. They embody Alabama, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, New Hampshire, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Wisconsin and Wyoming.
The federal minimal wage for tipped employees is $2.13 per hour, supplied their suggestions deliver them to the $7.25 per hour federal minimal wage. Michigan just lately turned the primary state in additional than 4 a long time to get rid of the subminimum wage for tipped employees.
Harris has not stated how excessive she desires to lift the minimal wage, although she has praised states which have raised the speed to at the very least $15 per hour.
The Harris marketing campaign didn’t return a request for remark by CNBC.
Congressional Democrats in 2021 tried to lift the federal minimal wage to $15 per hour as a part of a broader Covid aid bundle. Nevertheless, these efforts failed after it was decided the change couldn’t be included in laws dealt with by means of a one-party majority.
Throughout a 2020 debate, then President Donald Trump expressed issues about whether or not elevating the federal pay threshold would harm small companies.
“How are you helping your small businesses when you’re forcing wages?” Trump stated through the 2020 debate. “What’s going to happen and what’s been proven to happen is when you do that these small businesses fire many of their employees.”
Trump’s marketing campaign didn’t reply a request for remark by CNBC.
A CNBC survey from earlier this 12 months discovered a majority of small enterprise house owners — 61% — assist elevating their state’s minimal wage, although half stated such a change may make it tough to have the ability to afford to pay employees who’re vital to their companies.
One level that tends to get misplaced within the minimal wage debate is the connection between a better wage and stronger client shopping for energy, in line with Holly Sklar, CEO of advocacy group Enterprise for a Honest Minimal Wage.
“When you lose minimum wage buying power, it means you’re losing customer buying power,” Sklar stated.
As soon as employees earn larger minimal wages, they are going to be extra prone to spend that cash, which is able to assist companies, she stated.
Elevating right this moment’s federal minimal wage would assist low-wage employees who’re making an attempt to earn a residing and have a way of financial safety, stated Ben Zipperer, senior economist on the Financial Coverage Institute, a Washington, D.C., suppose tank that gives financial analysis.
“The minimum wage has basically lost, 29%, 30% of its purchasing power over the last 15 years, simply because Congress has failed to update it,” Zipperer stated.
Lifting the minimal wage threshold to $15 per hour would improve the incomes of about 20 million employees, Zipperer stated. That would come with people who find themselves low-wage employees who could also be incomes hourly pay that’s barely greater than the federal minimal wage threshold.
“Changes in wages don’t necessarily result in big changes in employment,” Zipperer stated.
“When you raise wages at a particular workplace, that makes it a lot easier to recruit and retain workers,” he stated.
Some firms, corresponding to Goal and Walmart, have set their very own larger minimal pay thresholds, at $15 and $14 per hour, respectively, in response to tight retail labor market situations.
Nonetheless, advocates hope for a broader change on the nationwide stage.
“We look forward to supporting efforts to raise the minimum wage in the next White House, in the next Congress, and showing that there’s a very good business case for that,” Sklar stated.
