The U.S. House of Representatives today approved a bill to gradually increase the federal minimum wage to $15 per hour by 2025. The current federal minimum wage – which has not been raised since 2009 – is $7.25 per hour.
The Maryland General Assembly this year passed House Bill 166/Senate Bill 280 (Chs. 10 and 11), legislation to phase in an increase in the State minimum wage to $15.00 per hour by January 1, 2025, with a longer phase-in for employers with 14 or fewer employees.
But the Raise the Wage Act of 2019, which passed the U.S. House by a vote of 231-199, faces an uphill battle in the U.S. Senate.
According to The Hill:
Liberals won the battle for enacting a wage hike to $15 across the country, while centrists succeeded in lengthening the time period for the extension from five to six years. The legislation also includes an amendment requiring that its economic impact be studied as the wage hike is phased in.
The legislation is not expected to be taken up in the GOP Senate, but will likely be a theme in next year’s electoral campaigns.
The Congressional Budget Office, the fiscal professionals serving the US Congress, prepare the oft-watched “scores” for fiscal proposals, as well as various policy reports throughout the year. Last week, they released a report on the economic impacts of changing the federal minimum wage.
The full report, “The Effects on Employment and Family Income of Increasing the Federal Minimum Wage,” is available on the CBO website.
Their central analysis of a $15 minimum wage – which would match that recently adopted by Maryland to be phased-in over a similar period of time, shows expected impacts on working families, and some contraction of jobs:
In an average week in 2025, the $15 option would boost the wages of 17 million workers who would otherwise earn less than $15 per hour. Another 10 million workers otherwise earning slightly more than $15 per hour might see their wages rise as well. But 1.3 million other workers would become jobless, according to CBO’s median estimate. There is a two-thirds chance that the change in employment would be between about zero and a decrease of 3.7 million workers. The number of people with annual income below the poverty threshold in 2025 would fall by 1.3 million.
Stay tuned to Conduit Street for more information.