Biden wants a federal minimum wage of $ 15 per hour. Is America Ready?

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President Joe Biden is expected to present his proposal to raise the federal hourly minimum wage on Friday, which has been stuck at $ 7.25 since 2009. Biden would begin the process by requiring that all people working for the federal government receive a minimum wage of $ 15 per hour. .

Organized labor and its supporters have been agitating for a $ 15 minimum wage for nearly a decade, but shifting political winds, the embrace of populism on both sides of the oil and widespread financial pain for Americans at the bottom of the income spectrum is a minimum wage. Let’s make. Enhancing a policy whose time has finally come.

“If the bare minimum wage were raised, it would have provided a much-needed financial shot in the arm for many of those in a state of financial fragility,” said Mark Hamrick, senior economic analyst at Bankrate.com.

He said that resistance to raising the wage floor has led to waxing and wastage over the years. “Prior to the erosion of the political middle ground in recent years, the idea of ​​a federal minimum wage was controversial. This was seen as helping the economy and also reflected a statement that labor was valued. “

Keeping more money in the hands of workers can boost economic activity when it flags. “That money will be given to work through consumer spending and savings, which will ultimately support the broader economy,” Hamrick said.

It can also help taxpayers. In a new report, researchers at the University of California, Berkeley, Center for Labor Research and Education found that nearly half of poor families rely on one or more of the five taxpayer-backed safety net programs, including Medicaid, the Children’s Health Insurance Program. Temporary Assistance, Earned Income Tax Credit and Supplementary Nutrition Assistance Program for needy families. Collectively, this costs taxpayers $ 107 billion per year – money that activists advocate can be put to better use, to keep labor costs down to seek publicly funded aid Not effectively subsidizing the strategy of corporations.

Advocates for a higher minimum wage argue that corporate America can bear the cost of higher minimum wages more easily than families forced to live hand-to-mouth.

Advocates of higher minimum wages also argue that corporate America can bear the costs of higher minimum wages more easily than families forced to live hand to mouth. “In general, most analysts believe that Ruth Milkman, a professor of sociology at the City University of New York, said that working people benefit greatly from such costs.”

Analysts say companies employing large numbers of low-paid employees will suffer the brunt of the economic hit. Large corporations, particularly fast-food restaurant chains such as McDonald’s and national retail behemoths such as Walmart, will have the most impact. Even those who currently pay more than the minimum wage prevalent in their locations, such as Amazon, which makes a $ 15 minimum hourly wage in 2018, are likely to receive that hiring floor to keep their recruitment and retention competitive. Has to be raised.

“In the near term, I don’t think Amazon has much concern about it, but at some point they probably want to keep ahead of the minimum, and they have to adjust,” said Harry Holzer, a public at Georgetown University Professor of Policy.

“Basically, any company that hires low-paid individuals will see increased costs,” said Sam Stowal, CFRA Research’s chief investment strategist.

A new federal minimum wage could be structured in a way to minimize the impact on mom-and-pop stores and restaurants, many of which are already under severe stress as a result of the epidemic. Hamrick said the minimum could be applied in more subtle ways to reduce regional negative impacts, as well as to implement regional differences as well as in a phased manner over the scale of the enterprise and the duration of the phases, ”said Hamrick, Incorporating the minimum criteria into a benchmark inflation metric will ensure that low-paid workers do not hold back when costs rise.

Despite bitter political polarization in the United States today, both public and public opinion polls in red and blue states show strong support for a higher minimum wage. An August poll found that 72 percent of Americans – including 62 percent of Republicans and 87 percent of Democrats – said the minimum wage should be enough to keep full-time workers above the poverty line.

This may increase the possibility of a higher minimum wage on a bipartisan basis. “The low-paid business sector hates it and conservative lobbyists hate it but it’s also quite popular in the red states, so it’s possible that you can say to some Republican senators, ‘my constituents like this,’ especially Some of the more populous Republicans, Holzer said.

But hiking it to double its current level of $ 7.25 per hour, could be a tough sell, Holzer added, especially in the heartland. “I’m guessing that if a minimum wage passes it could be like $ 10 or $ 12 instead of $ 15, and it could be applied gradually,” he said. “For many large cities and populous states that have already implemented it, this is not a terrible idea. They are already high-wage, high-value sectors. The problem is that in states where rural areas are very high, $ 15 is not far below the central region of this region. “The risk that some of those jobs will disappear is high.”

When wages have increased, the question of whether wage increases have been much debated and thoroughly studied has led to widespread conclusions by researchers. Milkman said, “Predictions say that a higher minimum wage will lead to a job loss.”

The Nonpartisan Congressional Budget Office has determined in its 2019 report that the hourly minimum wage can be increased to 1525 by 2025, on average, the labor force will provide 1.3 million jobs, but also 1.3 million jobs out of poverty and additional These families will contribute a total household income of $ 8 billion.

Given the seismic disruption of the jobs market affected by the epidemic, implementing policies that inhibit job growth may seem risky, but the particular distortion created by the epidemic may actually reduce the negative impact, some Suggest Conventional wisdom is that a higher minimum wage motivates large low-wage companies to invest in equipment and robotics to facilitate greater automation – investments actually cut person-to-person contact and disrupt transmission There are many investments to do Kovid 19.

Stowal said that whatever automation can happen now, it will be expedited. “I think it’s going to be more than that.”

“The epidemic has shifted, in many dimensions, towards technology,” said Holzer. “The $ 15 minimum wage will probably move it even more … even if a lot of it is happening.”

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