The Best Way To Help Workers And Preserve FDR’s Legacy – Ensuring The Minimum Wage Keeps Up With Economic Growth
The US$1.9 trillion pandemic relief bill that the House just passed includes a gradual increase in the federal minimum wage to $15 per hour by 2025. While its chances in the Senate appear slim, the proposal has brought national attention to the minimum wage, which has been stuck at $7.25 since 2009.
Supporters argue a higher minimum wage would translate into higher incomes for millions of low-wage employees, such as restaurant waiters, retail salespeople and child care workers, and thereby lift a lot of people out of poverty. Opponents claim it would hurt businesses and lead to a lot of job losses.
As an economist who studies labor markets and income inequality, I believe both claims exaggerate the impact and miss a key point of what the minimum wage is meant to achieve. The current deba...