New Federal Minimum Wage
Biden to Raise Federal Minimum Wage
Before his formal inauguration, US President Joe Biden reassured Americans of his commitment to raising the federal minimum wage to $15 per hour.
In the statement, which was given at a press conference, the then-president-elect further emphasized that it was unjust for those working one full-time job (40 hours per week) to live below the national poverty line.
What is the Federal Minimum Wage Today?
The current federal minimum wage hourly is a modest $7.25 and has remained the same for just over a decade, though some states have their own minimum wage. Raising federal minimum wage to $15 an hour would be an essential change that many are calling for, including experts from the Economic Policy Institute who have data that demonstrates how the current federal minimum wage would be insufficient given the rate of inflation that many in the US population are struggling with today. The last time federal minimum wage was raised was in 2009 where it increased from $6.55 to $7.25 per hour.
What to Know About Minimum Wage
Though some in the federal government have been dragging their feet on giving the federal minimum wage a boost, many states and cities have taken the initiative to raise their own minimum wages themselves, such as New York which enforces a $15 per hour minimum wage. As a matter of fact, most US states have higher minimum wages than the official federal minimum wage.
Recently, there are around 20 states and 30 cities have decided to offer their residents a higher minimum wage. Even some cities in California, such as Sunnyvale and Mountain View, have a minimum wage of $16.30, which is higher than the state minimum wage, current federal minimum wage, and proposed federal minimum wage.
Fiscal conservatives remain skeptical about the initiative, claiming that it would be a hindrance to the revival of America’s ailing economy since it will increase labor costs for businesses. However, there is a possibility that even the staunchest conservative lawmakers may capitulate to popular demand.
Those opposed to the idea may not have considered the fact that an increase in the minimum wage could potentially reduce the widespread dependence on social welfare programs, which cost US taxpayers over a hundred billion dollars annually. According to a study from the University of California, Berkeley’s Center for Labor Research and Education, almost 50% of low-income households depend on one or several of the well-known government-funded programs, such as Supplemental Nutrition Assistance Program (SNAP), Temporary Aid for Needy Families (TANF), the Children’s Health Insurance Program, Medicaid, and the Earned Income Tax Credit. Experts claim that making the minimum wage $15 per hour could significantly reduce the government spending needed to sustain all of these programs, such that officials can use public funds for other essential projects, such as infrastructure.
Even with the uproar that is going to be caused when trying to push this proposal through, it has received official support by the most prominent figures in the Democratic Party, some of whom were the president’s former rivals for the party’s nomination. These figures include current Vice President Kamala Harris, Bernie Sanders, Amy Klobuchar, Elizabeth Warren, and Cory Booker. It even includes the former presidential contender and billionaire business tycoon Mike Bloomberg, who used to be the mayor of New York City.
It’s important to also understand that even if the minimum wage is increased, that may not necessarily take people out of poverty. It will just alleviate their situation enough for them to have fewer financial struggles. In the meantime, it may be a good idea to look into getting government assistance, since there is a long struggle ahead for the new minimum wage to be approved. There are various government programs to look into for those who are struggling with rent, such as Section 8 Assistance and temporary transitional housing initiatives, which help keep people off the streets.
Article by Christine – in partnership with Daily Prosper