Anika Begay
Activists demonstrate in support of a $15 an hour minimum wage and tips for restaurant workers in Washington, DC, on February 8, 2022.
Mandel E | Afp | Getty Images
The federal minimum wage recently marked another anniversary. But for the workers affected, it may not be something to celebrate.
The federal minimum wage has been stuck at $7.25 an hour for 15 years.
On the campaign trail, Democratic presidential candidate Kamala Harris recently suggested that things need to change.
“When I am president, we will continue our fight for American working families, including to raise the minimum wage and eliminate tip taxes for service and hospitality workers,” Harris said at a campaign event in Nevada on August 10.
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Many states have enacted minimum hourly rates that are higher than the federal minimum wage. However, 20 states have wages that are no higher than the federal level, according to Business for a Fair Minimum Wage. These include Alabama, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, New Hampshire, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Wisconsin, and Wyoming.
The federal minimum wage for tipped workers is $2.13 per hour, provided their tips bring them up to the federal minimum wage of $7.25 per hour. Michigan recently became the first state in more than four decades to eliminate the minimum wage for tipped workers.
Harris did not say how much she would like to raise the minimum wage, though she praised states that have raised the rate to at least $15 an hour.
Harris’s campaign did not respond to Vscek’s request for comment.
In 2021, congressional Democrats attempted to raise the federal minimum wage to $15 an hour as part of a broader COVID relief package. However, those efforts failed after it was determined that the change could not be included in legislation run by a single-party majority.
During a 2020 debate, then-President Donald Trump expressed concern that raising the federal wage threshold could hurt small businesses.
“How do you help your small businesses when you mandate wages?” Trump said during the 2020 debate. “What’s going to happen and what’s been proven to happen is when you do that, these small businesses are going to lay off a lot of their workers.”
The Trump campaign did not respond to Vscek’s request for comment.
A Vscek poll conducted earlier this year found that a majority of small business owners (61%) support raising their state’s minimum wage, although half said such a change could make it difficult for them to afford to pay essential workers for their businesses.
One point that tends to go unnoticed in the minimum wage debate is the connection between higher wages and greater consumer purchasing power, says Holly Sklar, CEO of the advocacy group Business for a Fair Minimum Wage.
“When you lose the purchasing power of the minimum wage, you lose the purchasing power of customers,” Sklar said.
Once workers earn higher minimum wages, they will be more likely to spend that money, which will help businesses, he said.
Raising the current federal minimum wage would help low-income workers trying to earn a living and have a sense of economic security, said Ben Zipperer, senior economist at the Economic Policy Institute, a Washington, D.C.-based think tank that provides economic research.
“The minimum wage has essentially lost 29%, 30% of its purchasing power over the last 15 years, simply because Congress has failed to update it,” Zipperer said.
Raising the minimum wage to $15 an hour would increase the incomes of about 20 million workers, Zipperer said. That would include people who are low-wage workers who could earn an hourly wage slightly above the federal minimum wage.
“Changes in wages don’t necessarily lead to big changes in employment,” Zipperer said.
“When you raise wages in a particular job, it becomes much easier to recruit and retain workers,” he said.
Some companies, such as Target and Walmart, have set higher minimum wage thresholds of $15 and $14 an hour, respectively, in response to difficult retail labor market conditions.
However, supporters are hoping for broader change nationwide.
“We look forward to supporting efforts to raise the minimum wage in the next White House, in the next Congress, and showing that there is a very good case for doing so,” Sklar said.
