- A bill introduced Tuesday could, if signed into law, raise the federal minimum wage to $15 per hour by 2025.
- The Raise the Wage Act of 2021, proposed by U.S. House of Representative Democrats, would begin with a boost to $9.50 on the prospective law’s effective date. The rate would increase each year until reaching $15 five years after the law takes effect.
- The bill also would eventually eliminate the tipped minimum wage — a provision that allows an employer to count employees’ tips toward its minimum wage responsibility — and subminimum wages for workers with disabilities and young workers.
The bill appears to make good on several of President Joe Biden’s campaign promises. Biden in the months leading up to the election repeatedly called for a $15 minimum wage and the elimination of the subminimum wages.
The bill’s likelihood of success, of course, remains to be seen. The House passed a similar bill in 2019, but it didn’t find success in the Senate; now, however, Democrats control both houses of Congress. In a press conference announcing the bill, Sen. Bernie Sanders, I-VT, expressed hope that Senate Republicans would support the measure but said if not, he will fight to implement the changes through the reconciliation process with a simple majority in the Senate.
While many employers already are subject to state and local minimum wage rates higher than the federal rate, others have opted to move to a $15 minimum voluntarily. Target, for example, raised its starting wage to $15 per hour last year.
The long-term effects of such increases is hotly debated. The Congressional Budget office in 2019 predicted that an increase to $15 an hour by Jan. 1, 2025, could raise the wages of 27 million U.S. workers while also putting an estimated 1.3 million out of work. A 2018 report examining minimum wages higher than $10, however, found no significant drop in employment.