A Minimum Wage for Maximum Results
By Omer Arain (@Omersarain)
Congress has not raised the federal minimum wage since 2007 and today it remains at a meager $7.25 per hour. This makes it the longest period of time without an increase in the minimum wage’s 81-year history. As inflation erodes the purchasing power of the dollar every year, the minimum wage drifts further from a realistic, livable wage.
The Fight for $15 began in 2012 when a few hundred fast food workers in New York City walked off the job to demand $15 per hour and the right to unionize. Now, a once radical idea of a $15 minimum is becoming reality, in states like New York, California, Illinois, Maryland, Massachusetts, New Jersey, Connecticut, and the District of Columbia.
The House of Representatives recently passed the Raise the Wage Act, which gradually raises the federal minimum to $15 by 2025 and indexes further adjustments to median wage growth. Unfortunately, there is little reason to expect Senate Majority Leader Mitch McConnell to bring the bill to the Senate floor. And naturally, President Trump has no coherent stance on the issue. first opposing raising the minimum wage, then supporting a $15 minimum, then again opposing raising the minimum wage, then claiming to be open to a wage increase, then opposing having a federal minimum wage, and currently settling on openness to a $10 per hour rate.
According to a recent Pew Research Center poll, two-thirds of Americans support a $15 minimum wage. Even 43% of Republicans support the increase, with 56% support among Republicans earning less than $40,000 per year. A second survey published by The Hill showed 81% of Americans support raising the minimum wage with 55% of Americans supporting a $15 minimum.
The Congressional Budget Office estimates that a $15 minimum by 2025 raises earnings for 27 million Americans, lifting 1.3 million out of poverty. The Economic Policy Institute estimates the number of affected workers actually reaches 33 million Americans, not including the states that have already raised wage floors. The CBO and EPI estimates both demonstrate an increase in total earnings for low-wage workers and a decrease in the number of people living below the poverty line.
In addition, the benefits for raising the minimum wage are concentrated in Republican districts, making this a great 2020 campaign issue. The below graph combines EPI data and 2016 election results, to see what proportion of workers would be impacted in Republican and Democratic districts.
Republican districts make up roughly two-thirds of all workers impacted by a national $15 minimum. Across all districts, the median share of workers receiving raises is 36% of working women, 47% of working Hispanic people, and 41% of working Black people. In some districts, more than half of working-class people of color would receive a raise from a $15 minimum.
Interestingly, these impacts are not just constrained to particular types of Trump districts. Plotting Trump’s margin by the number of workers affected shows no clear pattern. Although we cannot know for certain if or how these potentially impacted workers voted, research consistently shows that low-income voters are less likely to vote. This implies that those who would be affected by minimum wage increases are also potential turnout targets.
For the longest stretch in 81 years, Congress has not passed a wage increase. A $15 per hour minimum wage is supported by a significant majority of the American public. Its economic benefits are backed by research, promising to notably raise earnings in Republican districts and for communities of color. What a case study for the American political process. With the hysteria of the presidential campaign looming, it is difficult to imagine the Senate and White House passing the raise into law. What is clear, however, is that a $15 minimum wage raises earnings for working-class people and reduces the number of people living under the poverty line.
Omer Arain is a DC-based labor researcher. He can be found on Twitter at @omersarain.