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There’s been a lot of discussion around raising the minimum wage to $15 an hour.
Currently, there’s two possible routes for Democrats to pass the wage hike: as a standalone bill or through reconciliation. Sen. Bernie Sanders (I-Vt.) has indicated that reconciliation — where the bill could pass with only Democrats’ votes in the Senate — is his preferred route.
But both versions of passing the increase would see the minimum wage get to $15 only gradually, after several years. Under the Raise the Wage Act of 2021, the minimum wage would gradually increase to $15 until 2025. Then it would be indexed to median wage growth.
For some, that delay to $15 is jarring. President Joe Biden said throughout his campaign — and in a presidential debate — that he supported a $15 minimum wage, but at the time he didn’t provide a timeline for that rollout.
When Biden recently reiterated his support for the measure at a CNN town hall, he stressed the importance of a gradual increase. He also reportedly told governors the increase likely won’t be included in his stimulus package.
“President Biden campaigned on the promise of a $15-per-hour minimum wage, and to hear him backpedal on that promise and propose a gradual increase over time is disheartening,” Cynthia Murray, a Walmart worker for over 20 years and member leader with United for Respect, wrote in a statement to Insider. “We know that $15 an hour is the bare minimum of what workers need to survive.”
So why a gradual increase?
Ben Zipperer, an economist at the Economic Policy Institute (EPI), said that $15 in 2025 would be an “appropriate” level since it would put a dent in “poverty wages.”
“There is a kind of a large hole that we’ve dug ourselves in having low minimum wages relative to what workers need,” he told Insider. “And so then I think it does make sense to have some kind of gradual set of increases, because you do want to give time for some businesses to accommodate the higher wage schedule.”
Researcher Yannet Lathrop of the National Employment Law Project previously told Insider that a gradual increase makes sense, as in some states a $15 minimum wage is more than double the current rate. She said that, if their minimums were closer to $15, it would make sense to do the increase in one or two steps.
However, that’s not the case in many states. Currently, 16 states have the same minimum wage as the federal rate of $7.25, and five default to the federal minimum. That means just 29 states have rates above the federal minimum.
Minimum wages have stayed low for a long time
Broadly, Zipperer said, minimum wage increases used to be more frequent and roughly track the productivity of the economy. But that slowly came to a halt by the 1980s, when there were very few minimum wage increases — leading to a fall in value of the minimum wage. It hasn’t caught up since.
“Had we continued since the 1960s to increase minimum wages in accordance with the productivity of the economy, the minimum wage today would be over $20 an hour,” Zipperer said. “So the money is there. The economy can support much higher wages. It’s just that we’ve effectively redistributed that money away from low-wage workers towards the highest-paid people in the economy.”
And while a minimum wage increase is one step towards addressing that, Zipperer said it’ll take a “larger set” of policies such as higher taxes on higher income and stronger collective bargaining rights to correct this dynamic.
When it comes to workers like Murray expressing disappointment over how long it’ll take to actually receive that raise, Zipperer said he “can’t disagree with that.” Groups like Fight for 15 have been advocating for higher minimum wages for years.
“It is a really a negative mark on this country that we have kept minimum wages so low for so long,” he said. “We have a very large hole to climb out of if we’re going to actually pay people decent wages. And that is the product of decades of infrequent and inadequate minimum wage increases.”