On January 16, Democratic leaders introduced the Raise the Wage Act of 2019 in the House. The bill, which was introduced with 181 House cosponsors, would gradually raise the minimum wage to $15 in 2024, index future minimum wage increases to median wage growth, and ensure all workers are paid at least the full federal minimum wage by phasing out the subminimum wages for tipped workers, youth workers, and workers with disabilities.
Minimum wage boost. The Raise the Wage Act would increase the federal minimum wage for employees over a six-year period. In 2019, the first year, the minimum wage would increase by $1.30 from $7.25 to $8.55 per hour. This increase would occur on the first day of the third month that begins after the legislation’s date of enactment (the effective date). The minimum wage would increase every year thereafter in increments of $1.30 for four years, and in the fifth year by $1.25, to reach $15.00 under the following schedule:
|2020 to $9.85;|
|2021 to $11.15;|
|2022 to $12.45;|
|2023 to $13.75; and|
|2024 to $15.00.|
In 2026, six years after the effective date of Raise the Wage Act, the minimum wage would be indexed to median wages. The Secretary of Labor, through the Bureau of Labor Statistics, would calculate this change by compiling data on the hourly wages of all employees.
40M workers affected. 2017 estimates from the Economic Policy Institute indicate that raising the minimum wage to $15 would increase wages for about 40 million people—nearly 30 percent of the workforce, according to an analysis of the bill. Once fully phased in, this would roughly translate into an annual pay increase of about $3,500 for the average affected worker.
Boost to the economy. In terms of economic impact, economists agree that low-wage workers are more likely than other income groups to spend extra earnings immediately, according to the bill’s proponents. Researchers estimate that a 10 percent increase in the minimum wage would increase sales by about $2 billion each year.
“This new demand helps create an economy that works for everyone, not just the wealthy few,” the bill fact sheet states.
Senator Bernie Sanders (I-Vt.) introduced a companion bill in the Senate with 31 cosponsors. “Just a few short years ago, we were told that raising the minimum wage to $15 an hour was ‘radical,’” Sanders said in a release. “But a grassroots movement of millions of workers throughout this country refused to take ‘no’ for an answer. It is not a radical idea to say a job should lift you out of poverty, not keep you in it. The current $7.25 an hour federal minimum wage is a starvation wage. It must be increased to a living wage of $15 an hour.”
“No person working full-time in America should be living in poverty,” said Congressman Bobby Scott (D-Va.), chairman of the House Committee on Education and Labor. “The Raise the Wage Act will increase the pay and standard of living for nearly 40 million workers across this country. Raising the minimum wage is not only good for workers, it is good for businesses, and good for the economy. When we put money in the pockets of American workers, they will spend that money in their communities. This bill is a stimulus for Main Street America.”
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