Authored by: Matt Wathen, staff editor
The debate over the federal government’s minimum wage has seen an increase in intensity over the past few months. The debate came to the forefront when the Biden administration included a $15-an-hour minimum wage increase in the $1.9 trillion Covid relief plan.[1] While the proposal made it through the House of Representatives, it did not meet the Senate’s guidelines for the chamber’s reconciliation process. Consequently, it was stripped out of the relief plan.[2] The last time the federal government increased the federal minimum wage was in 2007 when an amendment was made to the Fair Labor Standards Act (“FLSA”) to gradually increase the minimum wage from $5.15 to $7.25 by July 24, 2009.[3] It has been almost twelve years since the last increase in the federal minimum wage. Within this time up to two-thirds of Americans now support an increase in raising the minimum wage to $15.[4]
While many people focus on the role of Congress and federal minimum wage standards counties and cities actually make most of the changes to minimum wages today.[5] Currently, only twenty-one states actually employ the federal government’s minimum wage of $7.25.[6] In the remaining twenty-nine states and the District of Columbia, minimum wages exceed the federal minimum and vary from $8.65 to $15.[7] The major example most experts currently focus on when determining the effects of a $15 minimum wage increase is Seattle, WA whose city council implemented a minimum wage increase law back in 2014.[8] The law gradually increased the minimum wage, requiring large employers to have a $15 minimum wage by 2018 and small employers to have it by 2021.[9]
Because Seattle was one of the first places where a $15 minimum wage was implemented, it became one of the first major places where studies and tests were taken to determine the effects of the new minimum wage increase. However, the results have been mixed with no side clearly coming out as having proven the positive or negative effects of the wage increase.[10] Some of the businesses studied continue to thrive even after the wage increase but dealt with employees wanting to work fewer hours due to their new increased wages.[11] Some businesses cut back on employee hours or increased prices of products, while other businesses did not change anything.[12] At the same time, some wonder whether Seattle’s rapidly growing economy has watered down the actual results other cities or states would experience if a $15 minimum wage were implemented.[13]
Current studies have not agreed upon whether a $15 minimum wage increase would have a positive or negative effect to the economy. With other cities and states beginning to implement minimum wage increases, we may have a clearer picture of a potential economic effect. For example, Virginia passed a bill last year to gradually increase the minimum wage to $12 by 2023 with an option being given to increase the minimum wage to $15 by 2026.[14] With more states and cities beginning to inch closer to a $15 minimum wage, the debate over a federally mandated increase will continue to be a topic of discussion until a clear result is found.
[1] Scott Detrow, Progressives Show Patience With Biden, At Least Until Relief Bill Passes, NPR (Mar. 3, 2021), https://www.npr.org/2021/03/03/973120107/progressives-show-patience-with-biden-at-least-until-relief-bill-passes.
[2] Lauren Fox et al., Senate parliamentarian rules against including minimum wage in Covid relief bill, CNN (Feb. 25, 2021), https://www.cnn.com/2021/02/25/politics/minimum-wage-covid-relief-senate-parliamentarian/index.html.
[3] History of Changes to the Minimum Wage Law, U.S. Dep’t of Lab., https://www.dol.gov/agencies/whd/minimum-wage/history (last visited Mar. 14, 2021).
[4] Leslie Davis & Hannah Hartig, Two-thirds of Americans favor raising federal minimum wage to $15 an hour, Pew Research Center (July 30, 2019), https://www.pewresearch.org/fact-tank/2019/07/30/two-thirds-of-americans-favor-raising-federal-minimum-wage-to-15-an-hour/.
[5] Drew Desilver, When it comes to raising the minimum wage, most of the action is in cities and states, not Congress, Pew Research Center (Mar. 12, 2021), https://www.pewresearch.org/fact-tank/2021/03/12/when-it-comes-to-raising-the-minimum-wage-most-of-the-action-is-in-cities-and-states-not-congress/.
[6] Id.
[7] Id.
[8] Kate Rogers & Nick Wells, Seattle passed a $15 minimum wage law in 2014. Here’s how it’s turned out so far, CNBC (Jan. 2, 2020), https://www.cnbc.com/2020/01/02/seattle-passed-a-15-minimum-wage-law-in-2014-heres-how-its-turned-out-so-far.html.
[9] $15 Minimum Wage, Office of the Mayor, http://murray.seattle.gov/minimumwage/ (last visited Mar. 14, 2021).
[10] Kate Rogers & Nick Wells, Seattle passed a $15 minimum wage law in 2014. Here’s how it’s turned out so far, CNBC (Jan. 2, 2020), https://www.cnbc.com/2020/01/02/seattle-passed-a-15-minimum-wage-law-in-2014-heres-how-its-turned-out-so-far.html.
[11] Id.
[12] Id.
[13] Id.
[14] Ned Oliver, Virginia lawmakers vote to raise the minimum wage to $12 over three years, Virginia Mercury (Mar. 8, 2020), https://www.virginiamercury.com/2020/03/08/virginia-lawmakers-vote-to-raise-the-minimum-wage-to-12/.