A group of Democrats plan to severely weaken a bill that would raise the federal minimum wage from $7.25 to $15 an hour by the year 2024.
The lawmakers proposed an alternative piece of legislation that would regionalize a wage increase, establishing a minimum wage floor that would vary by area.
In January, the Raise the Wage Act was introduced in the Senate by Senator Bernie Sanders (I-Vt.) and in the House by Representative Bobby Scott (D-Va.).
The bill goes beyond raising the minimum wage to $15 by 2024 to connect future minimum wage changes to median wage growth, ensuring that the minimum wage will rise if middle-class salaries grow. The legislation would also eradicate the sub-minimum wages often paid to tipped workers and employees with disabilities.
The Raise the Wage Act was introduced with 31 cosponsors in the Senate and 181 in the House, including a number of moderate Democrats. Its first hearing was held in front of the House Committee on Education and Labor in February.
It is supported by a number of Democratic presidential candidates besides Bernie Sanders, including Elizabeth Warren and Kamala Harris. A recent survey sponsored by the National Employment Law Project showed there is vast support in 2020 battleground districts for a federal $15 minimum wage.
However, a new bill was introduced this month by Representative Terri Sewell (D-AL): the Paying Hourly Americans Stronger Earnings (PHASE)-in $15 Wage Act.
The PHASE-in $15 Act would secure lower wages for employees in rural areas. While the minimum wage would rise, not everyone would reach $15 per hour by 2024.
“Fifteen dollars may be right for California where I live and I’m fine with it. But it’s not right for Perry County, Alabama,” Rep. Scott Peters (D-Calif.) told Politico this month. “A lot of the big companies would be able to handle this, but a lot of small companies would be adversely affected.”
Peters is one of 13 Democrats who introduced the bill with Sewell. Sewell’s bill also received support from moderates like the centrist think tank Third Way, which is also currently working to weaken popular Medicare for All proposals.
Third Way declared they are “thrilled to see the leadership from Rep. Terri Sewell who has brought a fresh approach to the minimum wage debate.”
Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute (EPI), views Sewell’s bill much differently.
Shierholz told Shadowproof the PHASE-in $15 Act “locks in an economics of inequality.” Twenty-one percent of the country’s low-wage workers would only see an increase to $11.50 an hour by 2024 under the bill. That would be $10 an hour in today’s dollars.
An additional 22 percent of low wage workers would only make $12.10 per hour in 5 years, which is $10.50 an hour in today’s dollars. This means in 2024 over 40 percent of the workforce would be making $10.50 or less per hour in 2019 dollars.
EPI’s research also demonstrates how the cost of living will increase over the next five years throughout the country, including many of the rural areas impacted by Sewell’s bill. For instance, a single adult in rural Missouri will need $35,706 by 2024, which is $17.17 an hour. Based on these statistics, it is not surprising that Missouri residents overwhelmingly voted to raise their minimum wage to $12 an hour by 2023 via a ballot question in the last election.
EPI’s work also suggests that many rural residents are already in need of a $15 minimum wage. The Family Budget Calculator is a tool that EPI developed to measure the income needed to attain an adequate standard of living throughout the country.
Take Perry County, Alabama, which Rep. Peters cited as an example of why Sewell’s legislation is necessary. EPI’s calculator shows a single adult with no children already needs $34,579 to live in the area. That’s about $18 an hour.
Shierholz pointed out the PHASE-in $15 Act only raises the minimum wage to $15 an hour in 17 metro areas, 15 of which already have $15 minimum wages. The bill would do little more than keep the minimum wage below $15 in the only places that haven’t already increased it to that rate.
“It pretty much gives no one a $15 wage in 2024,” Shierholz said.
Jasmine Thomas is a McDonald’s employee in Memphis affiliated with the Fight for $15 movement.
“People like me who are struggling to get by on $7.25 an hour at McDonald’s know better than lawmakers in Washington about what we need to raise our families,” she declared in a statement to the press.
“A $15 an hour wage is the bare minimum it takes to survive, which is why I’ve gone on strike, protested and done whatever it takes to win that raise and a voice on the job. Locking in a lower minimum wage for my community will do nothing but keep people stuck in poverty.”
“Working people need $15 an hour and a union in every corner of the country, and we’re not going to stop until we win,” she concluded.
Shierholz argued it is corporations like McDonald’s and Walmart that employee many of the workers in need of a raise. “Lots of rural areas are dominated by national firms that can clearly afford to pay more,” she noted.