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The Raise the Wage Act of 2021 would help eliminate poverty-level wages by raising the national minimum wage to $15 per hour by 2025. This report finds that the raise is long overdue and would deliver broad benefits to workers and the economy.
The current federal minimum wage is $7.25 per hour and has not been raised in over 10 years. A full-time federal minimum wage worker today earns 18% less than what her counterpart earned at the time of the last increase, after adjusting for rising costs of living ($15,080 annually in 2021 versus $18,458 in 2009).
In 1968, a minimum wage worker earned $10.59 per hour in inflation-adjusted terms, 46% more than today’s $7.25 federal minimum wage. The minimum wage today would be over $22 per hour had it tracked productivity increases over the last five decades.
The Raise the Wage Act of 2021, which phases in a $15 minimum wage by 2025, would raise the earnings of 32 million workers, or 21% of the workforce. Affected workers include those who would see their wages rise as the new minimum wage rate exceeds their current hourly pay and those who have a wage rate just above the new minimum wage who would receive a raise as employer pay scales are adjusted upward to reflect the new minimum wage.
$15 minimum wage by 2025 would raise the wages of at least 19 million essential and front-line workers. Essential and front-line workers constitute more than 60% of all workers who would see a pay increase.
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The purpose of minimum wages is to ensure that all workers in the United States (who worked at least 40 days a week) have enough resources to at least support the life of their family. So, in cases of contradictory occurrence like this, the higher minimum wage will be used over the lower ones.
If a state does not have a minimum wage law or its minimum wage is lower than the federal law, workers are entitled to the federal wage. If a state minimum wage is higher than the federal minimum wage, workers are entitled to the state-specific wage
In a recent poll, 67 percent of small business owners support raising the minimum wage to $15 an hour. They say it would spark consumer demand, allowing them to retain or hire new employees. And raising pay doesn't seem to force employers to cut jobs. It would help lift 900,000 people out of poverty. Increase the income of 17 million people (one in 10 workers), to the tune of $509 billion over 10 years. Potentially raise the wages of another 10 million people.
Several states have a minimum wage that is higher than the federal minimum. In those states that impose such a minimum wage, the minimum wage is more likely to act as a binding price floor, causing excess supply in the market. A price refers to the amount of money that a customer or consumer buying goods and services is willing to pay for the goods and services offered. The price of goods and services is set primarily by the seller or service provider. Price controls can be defined as standard restrictions or regulatory conditions that are normally established and enforced by the government of a country. Ultimately, this implies that price controls are used to impose government-set minimum and maximum prices to be charged for various goods and services on the market. This minimum price that can be charged, like the minimum wage, is known as the minimum price, while the maximum price that can be charged, such as rent control, is known as the maximum price.
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