Biden wants a minimum wage of $ 15. This is what people say it will do to the economy.

President Biden says his proposal to raise the federal minimum wage to $ 15 per hour will save many low-wage workers from poverty, but some companies and economists say the United States is pandemic. It warns that employment may be lost as it recovers from the layoffs.

Biden approves the plan More than double wages in stages over 4 yearsNote, for $ 15 per hour, a job can support a family of four and cannot live in poverty. The president’s adviser also thanked the essential workers in grocery stores and warehouses who continued to work during the coronavirus outbreak, raising wages from $ 7.25 per hour since 2009, and low wages. Workers who spend more say they boost the economy by allowing them.

Some large domestic employers Works well during the pandemic, Biden’s Deputy Director of the National Economic Council, Bharat Ramamurti, said in an interview. “Employee compensation does not necessarily reflect that. Raising the minimum wage is one way to give workers a fairer slice of income that helps them generate.”

Several states including California, Florida and Massachusetts Already on the road to reaching the $ 15 minimum wage Over the next few years, however, Ramamulti said floors should be applied to areas with low living costs. Parliamentary approval is required to raise the federal minimum wage.

“Whether you work anywhere in the United States, full-time, or 40 hours a week, you shouldn’t live in poverty,” he said. “A minimum wage of $ 15 will achieve that.”

Ten Republican senators have proposed a $ 618 billion coronavirus rescue plan to counter the $ 1.9 trillion stimulus bill outlined by President Biden after his inauguration. Gerald F. Save of the WSJ explains the important difference between the two proposals.Photo Illustration: Laura Kammerman

Economists are divided on the impact of the $ 15 minimum wage. Some have seen the increasing patchwork of states and provinces and found that they are barely unemployed compared to nearby areas with lower minimums. However, some say that unemployment associated with the $ 15 minimum wage can be more serious, especially in states where living costs are relatively low.

Opponents say the impact is felt in more rural states, such as Mississippi. According to the Ministry of Labor, half of all workers there will earn less than $ 15 an hour in 2019. This includes dishwashers, cashiers, firefighters and construction workers. Almost half of the workers in Arkansas, West Virginia, and Louisiana earn less than $ 15 an hour.

The previous highest federal minimum wage was set at about $ 12.25 per hour in 1968, adjusted to $ 2020. Since it was set in 2009, the current rate will be less than $ 9 per hour if adjusted for inflation.

Opponents of the significant increase say policymakers should pay particular attention to unemployment in low-wage industries such as the leisure and hospitality sectors. Lost 3.8 million jobs last year..

According to the Ministry of Labor, more than 37% of the workers who earned the federal minimum wage in 2019 were employed in restaurants, hotels and other hospitality sectors. Retail workers accounted for almost 23% of the minimum wage earners, and education and health employees, including home health assistants, accounted for 14%.

“This is a potentially catastrophic policy error,” said Kevin Hassett, former President Donald Trump’s chief economic adviser, on a minimum wage of $ 15. He said the pandemic put many small businesses on the brink of bankruptcy, but those restaurants and other companies are holding in hopes of profits later this year when the economy can open. He said raising the minimum wage would reduce those expected profits and close the business. “It will cost many people their work.”

Mr Hasett said low-wage workers have been disproportionately damaged by the pandemic and the government should support them through direct payments rather than requiring private companies to raise wages.

Independent Parliamentary Budget Office Found in a 2019 survey Raising the federal minimum wage to $ 15 per hour by 2025 could cost 1.3 million Americans to work. The same study found that higher levels could boost the wages of about 27 million workers and save 1.3 million Americans from poverty.

Many companies support raising the minimum from $ 7.25, but not the $ 15 / hour level.

“We continue to support the federal minimum wage increase, but believe that the increase reflects regional differences in wage rates and should be carefully designed so that the increase does not impair the recovery of SMEs. “We do,” said Joshua Borten. A lobbying group representing the CEO of a large company, a business roundtable.

With the United States Chamber of Commerce

Walmart Co., Ltd.

CEO Doug McMillion has issued a similar statement. Wal-Mart, the country’s largest private employer, Start workers for $ 11 an hour..

In a statement, Wal-Mart said its starting wage rate was “more than 50% higher than the federal minimum wage, which Washington hasn’t changed for more than a decade.” We support efforts to raise the minimum wage while continuing to invest in associates. ”

Other big companies,including Co., Ltd.


Goal Co., Ltd.

Have got Raised wages at the start Up to $ 15 per hour.

Paul Flick, CEO of Premium Service Brands, said that doubling the minimum wage would increase prices for brand franchisees (360º Painting, Handyman Pro, Maid Right, etc.) operated by Charlottesville, Virginia. ..

“I’m not against the increase, but jumping over 100% is crippled,” he said. “It can’t be absorbed and must be handed over to the customer … and if the customer can’t afford to buy the service, it means a furlough.”

Twenty-nine states have raised the minimum wage above the federal floor, but worker advocates are higher because employees in big cities such as Atlanta, Houston and Philadelphia can only pay $ 7.25 per hour. He states that a mission is also needed. Georgia, Texas and Pennsylvania follow federal interest rates.

Wander Lavender, who spoke at the Milwaukee rally last year, said her wages are struggling to pay for rent, electricity and telephone.


Fight for $ 15 and Union

39-year-old Wanda Lavender said he earns $ 12 an hour as an area manager for Popeye’s restaurant in Milwaukee, Wisconsin. She took that position because she offered a salary increase from the $ 9 hour day care job she was doing. Wisconsin is one of the states with a minimum of $ 7.25 per hour.

She says she works 40 to 60 hours most weeks, but still struggles to pay for rent, electricity and phone. Increasing to $ 15 per hour gives her more room for breathing and allows her to spend more time with her children. Like Mr. Lavender, the minimum wage employees are disproportionately female and black workers.

“I miss excursions, performances, and parent-teacher meetings,” she said. “You can’t take a holiday to be with them, otherwise you won’t be able to create an invoice.”

Arindrajit Dube, an economist at the University of Massachusetts Amherst, found little impact on employment in a study of raising the minimum wage, but clearly benefited from combating poverty.

“By raising the minimum wage, millions of people can get out of poverty and their families no longer have to rely on government assistance,” he said.

A left-wing think tank, the Institute for Economic Policy, said that a minimum wage of $ 15 would reduce annual spending on public assistance programs by $ 13.4 billion to $ 31 billion, with reduced tax credits and nutritional support. It was. These effects could drive the increase in the minimum wage through a process called reconciliation, which requires a simple majority in the Senate, some Democrats say.

Going out of these settlement procedures is likely to result in filibuster, which requires 60 votes to overcome. Given the widespread Republican opposition to the $ 15 minimum wage, this is unlikely to be a closely divided Senate.

Jonathan Meer, an economist at Texas A & M University, said that when the minimum wage reaches $ 15, businesses will use self-checkout kiosks and other technologies to replace workers, and businesses will pay workers books. Will be.

“In rural areas of the country, people are still working, but not $ 15 an hour,” he said. “Because they are paid under the table, they give up unemployment insurance, workers’ accident compensation and do not generate social security benefits.”

Note: The minimum wage in some states depends on the size of the employer and the location in the state. States without a minimum wage, or wages less than $ 7.25 per hour, reflect higher federal interest rates. The median share of $ 15 per hour reflects the latest available data, the median hourly wage for 2019.

Source: National Assembly of Parliamentarians (wage level) and Ministry of Labor (median wage share)

Write to With Eric Moras

Correction and amplification
Walmart Inc. Chief Executive Officer is Doug McMillon. In previous versions of this article, his name was misspelled as Doug McMillion. (Corrected on February 3)

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Biden wants a minimum wage of $ 15. This is what people say it will do to the economy.

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