House Democrats introduced the Raise the Wage Act of 2021 on Tuesday which would gradually raise the minimum wage to $15 per hour by 2025, and phase out the subminimum tipped wage that allows employers to factor gratuities into wages for tipped hourly employees. The bill, which was introduced by the House Committee on Education and Labor Chair Bobby Scott (Va.-03) and incoming Senate Budget Committee Chair Bernie Sanders (I-Vt.) updates the original Raise the Wage Act of 2019, which was not passed by Senate Republicans in 2019.
The bill would also index future minimum wage increases to median wage growth so that the value of the “minimum wage does not once again erode over time” and would phase out subminimum wages for adolescent workers and employees with disabilities.
The last time Congress raised the federal minimum wage was in 2009, where it currently stands at $7.25 per hour. Currently, only Washington, D.C. has a $15 minimum wage in place, while eight states (California, Connecticut, Florida, Illinois, Maryland, Massachusetts, New Jersey and New York) have plans to raise the minimum wage to $15 per hour sometime over the next few years.
“Even before the COVID-19 pandemic, the $7.25 federal minimum wage was economically and morally indefensible,” Chairman Scott said in a statement. “Now, the pandemic is highlighting the gross imbalance between the productivity of our nation’s workers and the wages they are paid. Many of the essential workers who have braved a public health crisis to keep food on the table and care for our loved ones are still not being paid enough to provide for themselves or their families.”
The Economic Policy Institute has estimated that the Raise the Wage Act would increase incomes for 32 million Americans, including one-third of Black workers and one-quarter of all Latino workers.
Chairman Scott’s bill cosponsor, Sen. Bernie Sanders, has been advocating for a $15 minimum wage for years:
“Today in America we’re facing massive wealth and income inequality,” Sanders said during a Tuesday press briefing on the minimum wage bill. “We must never lose sight of the fact that over half of workers in America today are living paycheck to paycheck. …] In the richest country in the history of the world if you work 40 hours a week you should not be living in poverty. This is not a radical idea; it’s what the American people want.”
But it might not be what every American wants. As the business community remains split on the issue of a $15 minimum wage, the National Restaurant Association released a statement expressing concern that small businesses will not be able to keep up with wage increases while recovering from the massive economic challenges from the pandemic.
“The Raise the Wage Act imposes an impossible challenge for the restaurant industry,” Sean Kennedy, executive vice president of public affairs for the National Restaurant Association said. “While other businesses on Main Street are starting to see a recovery, restaurants across the country are struggling to stay open amidst indoor dining bans or limits that have been in place for ten months. […] during a pandemic is not the time to impose a triple-digit increase in labor costs.”
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