Why Haven't Democrats Raised The Federal Minimum Wage?
Why Haven't Democrats Raised The Federal Minimum Wage?
The Bureau of Labor Statistics Says 1.5% of workers earn the minimum wage of $7.25.
A centerpiece of Democratic President Joe Biden’s campaign for the presidency was his pledge to raise the minimum wage to $15 per hour.
Why haven’t the Democrats, who control both houses of the U.S. Congress, delivered on Biden’s promise?
Most states have raised their minimum wage but 20 hold-out states refuse to raise their wage floor above the federal minimum. Consequently, millions of American workers still earn around $7.25 per hour, an amount fixed by the U.S. Congress on July 24, 2009.
Advocates of a minimum wage hike say there is no place in America today where a full-time worker earning the minimum wage can afford to pay rent, food and other essentials The hourly minimum is less than the price of a McDonald’s Big Mac meal ($8.19) or an afternoon snack at Starbucks [Mocha Frappuccino ($5.25) and chocolate chip cookie ($2.45)]
Pres. Biden signed an executive order directing his administration to ensure that federal employees and employees working on federal contracts earned a $15 per hour minimum wage. That order went into effect in January.
Ravages of Inflation
The Economic Policy Institute (EPI) reported last summer that the rising cost of living has diminished the purchasing power of the minimum wage. Adjusted for inflation, the federal minimum wage was worth 21% less in 2021 than it was in 2009, the last time it was increased by the U.S. Congress.
Since the EPI report, inflation in America has hit a 40-year high of 7.9%.
The Bureau of Justice Statistics in February reported that food prices increased by 7%, in the past year, while energy prices rose 27%.
According to CNBC, the cost of meat, poultry, fish and eggs is 13% higher since February 2021. Fresh fruit has gone up 10.6% in price in that time, while the price for vegetables has remained much more stable, increasing just 4.3%. The price of pre-packaged cereals and baked goods has increased 7.7%.
Hold Out States
The National Employment Law Project (NELP) recently called on Congress to raise the federal minimum wage to $15 per hour and to end the “shameful” $2.13 sub-minimum wage for tipped workers, younger workers, and people with disabilities.
According to the EPI, the following 20 states have refused to raise their wage floors above the federal minimum rate: 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.
Raise the Wage Act
In January 2021, congressional Democrats reintroduced the “Raise the Wage Act” to raise the federal minimum wage to $15 an hour over a five-year period and to eliminate the tipped ($2.13) sub-minimum wage.
The bill has languished in the face of stiff competition from the U.S. Chamber of Commerce, the National Restaurant Association and the International Franchise Association. Moreover, the Congressional Budget Office issued a report stating that increasing the minimum wage to $15 per hour would reduce employment by 1.4 million workers.
Pres. Biden, in his recent state of the union speech, again called upon Capitol Hill to raise the minimum wage to $15.
Here is a chart from the Economic Policy Institute showing the impact of time on the federal minimum wage:
