Democrats in both chambers of Congress on Tuesday reintroduced a bill to raise the federal minimum wage for the first time since 2009, setting a $15 an hour target by 2025.
That level would be more than double the current rate of $7.25 an hour, which was approved in 2007 and set in place two years later.
“Let’s be clear: The $7.25 an hour federal minimum wage is a starvation wage,” said incoming Senate Budget Committee Chairman Bernie Sanders (I-Vt.).
“No person in America can make it on $8, $10 or $12 an hour.”
The House approved the same legislation in 2019, but it languished in the GOP-controlled Senate.
Even with the Senate under narrow Democratic control, however, its prospects appear slim. The Senate cannot pass a minimum wage increase without the support of 10 Republicans to break a filibuster.
President Biden included the policy in his $1.9 trillion COVID-19 relief plan, but the minimum wage element is among the most controversial and precarious of its provisions. Biden has sought bipartisan support for the bill, but Democrats have threatened to advance it along party lines using budget reconciliation, a procedure that sidesteps the filibuster.
A minimum wage increase has been thought unlikely to pass muster with budget reconciliation’s restrictive requirements, but Sanders called for using the process anyway if the GOP withheld support.
“We must use reconciliation to increase the minimum wage to $15 an hour,” he said.
Senate Majority Whip Dick Durbin (D-Ill.) echoed the call, saying Democrats were looking into the process. Democrats argue that increasing the minimum wage will reduce federal safety net spending, thus making the move a budgetary one eligible for reconciliation.
Opponents of increasing the minimum wage say that it could have unintended negative consequences, including burdening small businesses, reducing employment and pushing companies toward automation.
A recent National Bureau of Economic Research paper analyzing minimum wage studies found that a majority showed some level of effect on unemployment, most prominently among young adult and less-educated workers.
But a Congressional Budget Office analysis on raising the minimum wage also found that it would dramatically decrease poverty, with a $15 minimum lifting 1.3 million people above the poverty line.
The Raise the Wage Act would start with a $2.25 boost to $9.50 and continue raising the minimum wage every year through 2025, after which it would index the minimum wage to median wages. It would also phase out the tipped minimum wage for restaurant service workers, the youth minimum wage and lower minimum wages for workers with disabilities.
“Even before the COVID-19 pandemic, the $7.25 federal minimum wage was economically and morally indefensible,” said House Education and Labor Committee Chairman Bobby Scott (D-Va.).
“Now, the pandemic is highlighting the gross imbalance between the productivity of our nation’s workers and the wages they are paid,” he added, pointing to essential workers who faced COVID-19 exposure in grocery stores and health care settings who remained below the poverty line.
A study by the left-leaning Economic Policy Institute found that raising the minimum wage would boost income for nearly 32 million Americans, with larger effects for Black, Latino and female workers.
Updated at 1:41 p.m.
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