Minimum Wage Increase? Not So Fast.

Published 03/08/2021
 
The immediate way forward appears to be bipartisan negotiations with Republicans.
 
 
$15 Minimum Wage – Not So Fast
 
The immediate increase of the federal minimum wage is dead, although Progressives in the Senate, led by Bernie Sanders (D), VT vowed to keep advocating for the increase.
 
The immediate way forward appears to be bipartisan negotiations with Republicans. Several Republicans, includes Minority Leader Mitch McConnell have indicated openness to a wage increase, but it is unlikely that this approach will bear immediate fruit in today’s hyper-partisan political climate.
 
While the $15-an-hour minimum wage has increasingly caught on in cities and states across the country over the past decade, Republicans have largely resisted those efforts. Sens. Mitt Romney and Tom Cotton recently introduced a bill to raise the federal hourly minimum wage to $10 hour. Jeanne Shaheen, (D) senator from N.H., favors a standalone debate on the issue.
 
Shaheen’s office said Friday that the senator supports raising the minimum wage to $15 an hour, but with “safeguards” in place for small businesses and restaurants that have been particularly hard-hit by the pandemic. In her interview with WMUR, Shaheen also expressed concerns about local nursing homes already struggling to employ people “because of the wage scale.”
 
New Hampshire is the only New England state that hasn’t raised its minimum wage to at least $11.50 an hour. (Massachusetts, Connecticut, and Rhode Island are all on track to raise it to $15 an hour in the coming years). In fact. the Granite State’s minimum wage remains at the federal floor for $7.25 an hour.
 
The $15 minimum wage debate is far from black and white. According to a new government study, a $15 an hour minimum wage would boost the earnings of 17 million workers and pull 900,000 people out of poverty, but this comes with tradeoffs. The report also says almost 1.5 million people would lose their jobs because of the $15 an hour minimum wage. Higher wages would increase the cost of doing business, so companies would raise prices, producing fewer goods and services and laying off some workers. The report says the higher prices and wages would also cost the government and raise the budget deficit.

 

 
Another socioeconomic discussion that is on the front burner is the reduction of wage inequality, getting more income to low-income people. This issue is focused on the different rates of pay (for the same work) between men and women. Although this is seen as an important issue, it can be viewed (incorrectly) as a bit ancillary to the minimum wage discussion. In actuality, as discussed in American Progress.org, 19 million women would benefit from increases in the minimum wage because Black women and Latinas are overrepresented among workers who would benefit.
 
As explained in the American Progress article, “Raising the minimum wage adds up to thousands more dollars for individual women every year. According to new analysis by the EPI and NELP, women working year-round, on average, would see an increase of about $3,500 in wages annually; and for Black women and Latinas, this figure increases to $3,700. This translates to a total wage increase of $66 billion for women working year-round. To boost the economic recovery, it is essential to get money into the hands of those who make spending decisions for their families, those who are breadwinners, and those who are likely to spend every additional dollar out of necessity.”
 
With increased income comes, of course, increased taxes. The more money you earn, the more tax you pay, putting money back into the government coffers.
 
Complicated issues? You bet. Coming down hard on either side is not so easy. As the debate continues, our professionals at ASN will watch what happens and keep you informed. If you would like to have a longer conversation regarding these issues, we would love to talk with you.