Via Eric Morath and Heather Haddon of the WSJ, the debate surrounding the federal minimum pay has been waged in Congress for months. According to the Education and Labor Committee, if President Biden’s proposed five-year increase to $15 – introduced in Congress as the Raise the Wage Act of 2021 – was enacted, 32 million Americans would have a raise, about 21% of America’s workforce.
Many businesses pay above the minimum of $7.25 an hour according to BLS reports. While business groups support raising the minimum wage, they did not support Biden’s proposal.
The $15 wage proposal is in major jeopardy after a Senate official ruled it as non-complying with budget reconciliation rules.
Smaller businesses are hesitant to accept the minimum-wage increase on the grounds of not being able to raise wages as easily as major corporations. Under 250,000 people in America’s workforce of 140 million were paid exactly the federal minimum wage last year, via the Labor Department.
The National Federation of Independent Business, representatives of small businesses, stated that a $15 minimum dis-proportionally affects smalls businesses as it estimates 900,000 jobs would be lost at businesses with fewer than 500 workers. Approximately 20% of members employ workers who are paid the federal minimum wage and 92% of NFIB members oppose the Raise the Wage Act.
The nonpartisan Congressional Budget Office said in a February report that raising the national minimum wage to $15 an hour by 2025 would reduce employment by 1.4 million Americans, but 27 million workers would have raises and 900,000 Americans would move above the poverty line.
The Business Roundtable, a group of CEOs for major corporations in America, support raising the minimum wage but is concerned about the $15 proposal. Walmart, America’s largest private employer, said it would lift its average hourly pay above $15 but keep its minimum at $11. CEO Doug McMillon stated the company supports a gradual rise, but that there are parts of the country where it should be lower than in others.
Large corporations such as Best Buy, Costco, and Target have a minimum wage of $15 or more.