Yahoo Finance Biden stimulus plan calls for $15 federal minimum wage
President-elect Joe Biden renewed his push to raise the minimum wage to $15 an hour during a press conference Thursday night in which he unveiled his pandemic relief bill.
“There should be a national minimum wage at $15 an hour,” Biden said while discussing his $1.9-trillion American Rescue Plan. “No one working 40 hours a week should live below the poverty line.”
The federal minimum wage currently sits at $7.25 an hour, a number that has been in place since 2009. As of 2021, the minimum wage in a majority of U.S. states is higher than the federal minimum.
Data shows that the federal minimum wage has not kept up with increases in the cost of living. Several states and cities have already implemented or are on track to implement raises to their minimum wages.
More than 30 cities, along with 20 states, raised their minimum wage in the new year.
Several cities in California opted to offer a higher minimum wage than the state-mandated minimum of $13 an hour for employers with more than 26 employees. Places like Mountain View and Sunnyvale both mandate a minimum wage of $16.30.
Minimum wage effects
A recent report by the UC Berkeley Center for Labor Research and Education found that if the federal minimum wage is raised to $15, more than 23 million Americans will receive a “direct boost” in pay, which would improve their lives amid the coronavirus pandemic.
The report looked at the families enrolled in one or more public safety programs and found if the minimum wage increases, almost half of them will benefit.
These families rely on the safety net programs “to meet their basic needs,” the report noted. These programs cost the state and federal government $107 billion a year.
It’s unclear whether Biden’s push to $15 would receive support from Republicans in Congress.
A statement from the Heritage Foundation, a right-leaning think tank, said that the proposal would “set back America’s economic recovery at a time when we should be moving forward” because of the labor costs the hike imposes on businesses, and that “Congress should reject this package.”
In any case, the president-elect remained optimistic.
“People tell me that’s gonna be hard to pass, he said. “Florida just passed this, divided as that state is. They just passed it.”
Florida voted on Election Day to bump its state minimum wage up to $15 incrementally until it’s fully effective by September 30, 2026.
“The rest of the country’s ready to move as well,” Biden stressed.
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Aarthi Swaminathan is a senior reporter for Yahoo Finance.
Read more:
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