The place efforts to boost the federal minimal wage stand

A restaurant worker at a May 26, 2021 “Wage Strike” demonstration organized by One Fair Wage in Washington, D.C.

Anna Moneymaker | Getty Images News | Getty Images

The coronavirus crisis has cast new attention on wages and income.

It’s been 12 years since the last federal minimum wage increase, and whether a hike in minimum pay will get passed by Congress or not is still a question.

The federal minimum wage is currently $7.25 per hour. That pay raise was approved by Congress in 2007, which gradually kicked it up to the present number in 2009.

For many workers trying to get by, that is a problem.

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“The minimum wage is far lower than it was at its peak over 50 years ago in 1968,” said economist Lawrence Mishel, distinguished fellow at the Economic Policy Institute, which tracks minimum wage changes.

That’s even as the productivity and efficiency of workers has more than doubled, he said.

“The failure to increase the minimum wage has really undercut the wages of the bottom third of the work force,” Mishel said.

A fight earlier this year to increase the federal minimum wage to $15 per hour was unsuccessful.

One reason why: That change was prohibited during the so-called reconciliation process. Consequently, a push by some lawmakers for a wage rate hike was not included.

Even as some Americans clamor for more stimulus checks, others ask: Why can’t we have a higher minimum wage instead?

Congressional outlook uncertain

“It certainly remains on the Democrats’ agenda,” Shai Akabas, director of economic policy at the Bipartisan Policy Center, said of efforts to raise the minimum wage on Capitol Hill.

However, it does not look like a near-term goal, he said.

“It seems unlikely that that will happen in the next several months,” Akabas said.

One reason is Democrats are again talking about pushing their next package through using the reconciliation process. As such, a higher federal minimum wage would not qualify for inclusion.

Democrats did not get their minimum wage legislatively, but … $15 per hour signs are in business after business window.

Ed Mills

Washington policy analyst at Raymond James

But while the fight for a higher federal minimum wage on Capitol Hill seems to have died for now, it has ignited consumer demand that is prompting an upward push in wages, said Ed Mills, Washington policy analyst at Raymond James.

“Democrats did not get their minimum wage legislatively, but they created market conditions that in many parts of this country, $15 per hour signs are in business after business window,” Mills said.

“Wages went to $15 per hour faster than they would have if it was done legislatively,” Mills said.

Some companies, states move toward higher pay

Certain companies have made headlines for their hourly wage goals. That includes Bank of America, which has said it plans to hike its minimum wage to $25 per hour by 2025, and retailers like Amazon and Target, which have promised to pay their workers $15 per hour.

Meanwhile, states are stepping in to raise their minimum pay rates. However, none of them currently have a $15 per hour wage in place, though states like Florida are working to gradually move toward that by 2026.

Currently, only four states have minimum wages greater or equal to $12.50 per hour, according to Business for a Fair Minimum Wage, which is campaigning for higher wages. They include California, Massachusetts, New York and Washington.

Meanwhile, 20 states have wages no higher than the $7.25 federal minimum wage.

Notably, President Joe Biden has moved to increase the federal minimum wage for federal contractors to $15 per hour.

One problem with waiting to address low hourly wages is rising inflation, according to Mishel.

“Inflation has already undercut the minimum wage quite a lot,” he said.

One argument against raising the hourly pay rate is that it could adversely businesses and employment. But there is little evidence to support those claims, Mishel said.

“There may be some firms that close, but others open up, too,” he said. “One can ask, if a firm can only survive with substandard wages, is that a good outcome?”

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