After getting nixed from this past spring’s reconciliation bill due to procedural rules, the federal $15 minimum wage proposal has been sidetracked given other legislative priorities for Democrats and the Biden administration.
Nevertheless, the so-called “Fight for $15” movement has pushed forward in other arenas, including corporate minimum wage campaigns and executive actions by President Biden. The threat of steep minimum wage hikes, even beyond the $15 amount, is still alive and well.
Currently, 41 cities and 1 county have wages set at or above $15 per hour. Eight states, 4 counties, and 4 cities have planned increases to reach $15 or more in the near future. Individual companies have been pushed to up their wages by the Fight for $15 campaign too – including giants like Amazon, Costco, Target, among others.
The $15 minimum wage target has become an accepted norm for many. Now, many organizations and lawmakers are moving the goalposts – to propose $20,or more than $30, per hour. Rep. Alexandria Ocasio-Cortez has made her intentions for a wage much higher than $15 very clear:
“[McDonald’s] workers in Denmark are paid $22/hr + 6 wks paid vacation. $15/hr is a deep compromise…”
Lawmakers, unions, and companies alike have pitched higher minimum wage targets.
In 2013, Sen. Elizabeth Warren argued that the federal minimum wage should be $22 per hour, citing employee productivity gains. Other lawmakers including Rep. Rashida Tlaib pushed for a $20 minimum wage using the same reasoning, and even the official Fight for $15 campaign tweeted out an article saying the minimum wage should be tied to labor productivity and raised to $24 per hour. This logic is misleading: when calculating productivity gains for industries that actually employ minimum wage earners, the result is a productivity increase of only about 11% since 1990 – meaning a federal minimum wage tied to these gains would be about $7.60 today.
Rep. Pramila Jayapal has argued the minimum wage should be as high as $33 per hour, illogically comparing the current minimum wage to growth of Wall Street bonuses, which similarly do not capture wage or productivity growth in industries that employ most minimum wage earners.
Another recent report attempted to create a steep benchmark for the federal minimum wage, calculating the “Housing Wage” employees needed to earn to rent a two-bedroom apartment – which they set at $24.90 per hour. This misleading and unrealistic metric ignores the reality that most minimum wage-earners are not in the market for two-bedroom housing, and the majority of those that are don’t rely on one minimum wage paycheck to afford it.
The Service Employees International Union (SEIU), which originally launched and backed the Fight for $15 campaign, has also begun fighting for higher amounts, like $20 per hour for caregivers. The AFL-CIO also argued the minimum wage should be more like $24 per hour if adjusted for inflation – another debunked argument.
Even President Biden acknowledged his desire for a wage higher than the Raise the Wage Act target of $15, saying “It’s just the start.”
It’s not just progressive lawmakers and unions moving the needle – many companies have embraced the ever-higher minimum wage benchmarks. Most recently, insurance giant MetLife announced it would raise the minimum wage for its employees from $15 up to $20 per hour. The following companies have also extended their wages past the “Fight for $15” benchmark:
- Aetna: $16 per hour (2015)
- Bank of America: $20 per hour (2020)
- Ben & Jerry’s: indexed annually, $18.13 per hour (2020)
- Charter Communications: $18 per hour (2021)
- Cigna: $16 per hour (2018)
- Costco: $16 per hour (2021)
- Fifth Third Bancorp: $18 per hour (2019)
- JP Morgan Chase: $16.50 to $20 per hour (2019)
The nonpartisan Congressional Budget Office (CBO) projected that the $15 federal minimum wage would cost the nation up to 2.7 million jobs. Studies show minimum wage hikes result in layoffs, schedule changes, and even business closures. Pushing the target minimum wage even higher ignores the devastating consequences steep wage hikes will have for America’s employees.