Is a $15 Per Hour Federal Minimum Wage on the Horizon?

The national minimum wage has sat at $7.25 per hour since 2009. Someone who works a full-time minimum wage job makes just over $15,000 a year. With the average rate for apartment rental in the U.S. costing close to $1,500 a month, there’s no way to survive on that salary without getting a second job. Meanwhile, many of the corporations that employ workers at minimum wage salaries, such as fast-food companies, are worth billions.

But all that might soon change. On Tuesday, Jan. 26, Democrats in Congress reintroduced legislation that would gradually raise the federal minimum wage to $15 an hour over the course of five years.

President Joe Biden’s $1.9 trillion COVID-19 relief plan also contains a provision that would require federal contractors to pay employees at least $15 an hour while also providing them emergency paid leave. Biden also signed an executive order in his first days in office, requesting the Department of Labor develop recommendations to provide federal government employees a $15 per hour minimum wage.

Despite these pushes, it’s questionable in a highly divided Senate whether lawmakers will be able to secure the votes to pass the legislation. In 2019, the Democrat-majority House passed a bill to increase the federal minimum wage, but it hit a wall in the Republican-majority Senate, with GOP leaders saying the increase would be too much of a burden on small businesses, especially in areas where the cost of living isn’t as high as it is in major metropolitan areas. They argued it would ultimately cost people jobs.

In 2019, the Congressional Budget Office ran an analysis that looked into the effects of raising the federal minimum wage to three options: $15, $12 and $10 an hour. It found that the $15 option would boost the wages of 17 million workers who currently make less. Another 10 million people already making slightly more than $15 might also see their wages rise. By 2025, the number of people living below the poverty line would decrease by 1.3 million. But because of the internal company staffing costs, that boost was also estimated to potentially result in more than a million firings and new jobless claims as well.

Economists estimated that the $12 and $10 per hour minimum wage options would mitigate some of those job losses but would not be as successful at pulling workers out of poverty.

Whatever number government officials land on, co-director of the Center for Economic Policy and Research Dean Baker said the fight for an increased minimum wage is not unreasonable. In a 2020 article published at Common Dreams, he wrote “if federal minimum wage increased with inflation since 1968, it would be close to $12 an hour today” — if it kept pace with increasing productivity growth, the minimum wage would be $24.

And should the matter come down to a strict Senate vote along party lines, Democrats may have the ability to advance the measure under a process known as budget reconciliation, which would be able to circumvent Republican filibuster. (Budget reconciliation allows tax and spending legislation with a simple bare majority vote.)

Currently 29 states and Washington, D.C. have minimum wages that are above the federal minimum wage. Last year, Florida voters approved a rise in minimum wage to $15 an hour by 2026. And other states are working to enact similar legislation, should the Senate efforts fail.

“In the richest country in the history of the world, if you work 40 hours a week, you should not be living in poverty,” Sen. Bernie Sanders, the incoming chairman of the Senate Budget Committee, told reporters on Tuesday, Jan. 26. “Minimum wage must be a living wage, enabling people to live with dignity.”