$15 minimum wage debate: what to know

One of the most significant labor movements, Fight for $15, has been gaining traction recently after raising the federal minimum wage was taken out of the last stimulus package.

**The current federal minimum wage is $7.25 per hour, a rate that has not been raised since 2009. **

When looking at the larger picture, like who benefits from a national minimum wage increase, how it compares with inflation, and its long-term effects - it's may seem clear that an increase on the national level is far overdue.

But, a closer look at the debate around raising the minimum wage reveals how there may be equally appealing arguments against it. Here's what you need to know about the minimum wage debate.

Where did the concept of minimum wage start?

The first state-level minimum wage law was passed in 1912 by the state of Massachusetts. Over the next two decades, other states followed suit until a Supreme Court case called Adkins v. Children's Hospital of D.C. ruled that a minimum wage violated worker and employer rights to liberty of contacts under the Fifth Amendment.

It wasn't until 1938 where under Franklin D. Roosevelt, Congress passed the Fair Labor Standards Act. The pay rate was set at $0.25 per hour (about $4 per hour in today's currency.)

Since then, Congress has raised the minimum wage 22 times, bringing it to the current state of $7.25 per hour. However, many people agree that another raise is needed ASAP.

"I am for the raise, it needed to be at least $15 a long time ago. The cost of living is up. People need to able to sustain, but they can not." - Maxanne Hammond-Watt, Jobcase Member

States and cities have the right to set their own minimum wage standards.

The minimum wage debate in 2021

This discussion is ongoing, and it's complex. While we don't have every key point listed, this article's purpose is to spark conversation, not express personal opinions. So we are going to cover some main thoughts expressed from each side of this debate.

Key points for those in favor of raising the minimum wage (pro)

Since the beginning of 2021, 20 states have raised the minimum wage, and many fast-food and restaurant giants, such as Amazon, McDonald's, and Target have committed to paying employee's at least $15 per hour. But the fight continues for higher pay and labor rights.

According to the Economic Policy Institute's report, it's estimated that a raise to $15 per hour would lift up to 3.7 million people, including 1.3 million children, out of poverty. Here are some other benefits of raising the minimum wage.

• It would increase pay for over 32 million workers in the US.
  An affected individual who works year-round will see an annual increase of approximately $3,300. This would also provide adequate wages to cover a family's most basic expenses and would no longer be at a poverty-level wage.

• **Increase to national minimum wage fosters a more racially just economy. **
  Earnings would rise for nearly one in three Black workers and one in four Hispanic workers, compared to about one in five white workers.

• A majority of those who will receive pay raises are essential and front-line workers.
  $15 minimum wage by 2025 would raise the salaries of at least 19 million essential and front-line workers.

• A wage increase would benefit the economy.
  Despite claims, evidence shows that minimum wage increases have not lead to significant job losses. In fact, having some extra income in millions of American families' pockets could help by boosting aggregate demand.

Key points for those not in favor of raising the minimum wage (con)

• Minimum wage increase could hurt small-businesses owners.
  According to a 2013 Gallup poll, 60% of small business owners think a wage increase will harm their business and force them to close stores since they cannot keep up with the pay requirements.

• The price of consumer goods and services would increase.
  There has been some evidence to show that prices of goods and services may increase if the minimum wage gets a boost.

• Increased competition for minimum wage jobs.
  Another potential impact of raising the minimum wage would be an increase in market competition for entry-level jobs. This could result in a large number of overqualified workers taking minimum wage jobs that would otherwise go to young or lesser experienced workers.

• Employee benefits will decrease and tax payments will increase.
  Some reports show that CFOs claim they would reduce employee benefits if the minimum wage was increased. It would also mean tax payments will increase as an individual's income tax bracket potentially changes.

What are YOUR thoughts on raising the minimum wage? Comment below!