Minimum wage increases may soon become a reality nationwide.
According to CNN, in 2013, President Barack Obama was calling for an increase to the national minimum wage to $9 per hour, with an increase to $12 per hour by 2020. A bill written by democratic senator Patty Murray and representative Robert C. “Bobby” Scott wrote the bill, the Raise the Wage Act of 2015, that would begin that process. Now, however, individual states, and even some cities, are already going to $12 to $13 per hour. Los Angeles, California, is debating as to raising the minimum wage to $15 per hour.
There are many reasons for the public and the government clamoring for an increase to the minimum wage. The populace, the government, and business owners are realizing that lower-paying jobs cannot stimulate the economy. For the people to begin spending more, they must be earning more. Though many are wanting $15 per hour, even an increase to $12 per hour would help stimulate the economy.
A Peter Hart poll completed in January, 2015, shows that three in four Americans, including 53 percent of Republicans and 73 percent of Independents) want a minimum wage increase to $12 per hour or more. Business owners have realized that giving their employees raises, and increasing the minimum wage, makes for a satisfied, harder working employee.
One significant change to the minimum wage that the Raise the Wage Act covers is the subminimum wage, paid usually to tippable employees, which is currently at $2.13 per hour, and has been for the past 20 years. Beginning in 2021, the minimum and subminimum wages will follow the growth in median wages, making wages more in line with cost of living adjustments.
The Los Angeles Times is reporting that one major factor in the need for a higher minimum wage is modern technology. Today’s technology has reduced the value of the lower-end wage earner, plus replaced many of them, as well. Globalization has brought lower-end wage earners into competition worldwide, making the market competitive, but dictates that the wages stay low.
A tool that would work in conjunction with a higher minimum wage would be the earned income tax credit. Making the EITC more generous, and make it available to families without children, would offer a financial pipeline that would affect the low-end wage earner in a more positive direction.
So, while pushing for higher wages would be a good start, there would have to be more done to make sure that the low-end wage earner could direct the increased funds towards an improved national economy. But, it would be a good start.
[Image courtesy of Fox News]