What Doubling the US Minimum Wage to US$15 Means for CEOs
Vice President Kamala Harris has backed raising the US federal minimum wage to at least US$15 an hour, saying she would push Congress to make it law.
“At least US$15 an hour, but we’ll work with Congress, right? It’s something that is going through Congress,” Harris said in an interview this week with NBC News.
Harris had previously not made clear what hourly rate she would back if elected.
The Vice President has gone public on raising the federal minimum wage — currently US$7.25 an hour — after her Republican rival, former President Donald Trump, deflected a question on whether he would back an increase earlier this week.
In a widely publicised campaign photo op, Trump was photographed serving burgers at a McDonald’s in the swing state of Pennsylvania.
Asked about raising the minimum wage, Trump was asked about raising the minimum wage.
“Well, I think this. These people work hard. They’re great,” was all the President replied.
The vice president seized on his non sequitur, criticising Trump by saying that she “absolutely” believed in raising the minimum wage to ensure that “hard-working Americans, whether they’re working at McDonald’s or anywhere else, should have at least the ability to be able to take care of their family”.
President Joe Biden has urged Congress to approve a US$15 minimum wage, and Harris has praised states which raised their minimum to that level.
Raising the federal minimum wage would require an act of Congress.
Economic reality
The truth is that an ever-shrinking number of workers in the US are paid the federal minimum wage of US$7.25 an hour, which a growing number of employers and economists agree is out of touch with economic reality.
Only 141,000 US workers were paid the US$7.25 minimum per hour in 2022, according to the Bureau of Labor Statistics. That’s down from 392,000 in 2019.
Yet the federal minimum wage has not been increased since 2009 - the longest time period without an increase since the national pay minimum became law in 1938.
Raising the minimum to US$15 an hour would boost pay for millions of workers who may be paid above US$7.25 but are still below 15 dollars an hour, Yannet Lathrop, a senior researcher and policy analyst at the National Employment Law Project, told CNN.
What doubling the federal minimum wage to US$15 means
Many of America’s largest employers, including Amazon, Walmart, Costco and Starbucks, already pay workers US$15 an hour or higher.
Walmart CEO Doug McMillon has previously said the federal minimum wage is “too low” and is “lagging behind”, calling on lawmakers to increase it from the US$7.25 floor.
Nick Hanauer, a US venture capitalist, has pointed out that such a low minimum wage is really an own goal for the American economy, as anyone on such a low income cannot afford to do anything but exist.
Said Hanauer: “The person earning the federal minimum wage of $7.25 isn't going out to eat at restaurants. They're not taking piano lessons. They're not going to the gym or the yoga studio. They're not sending mom flowers on Mother's day. What good is this person in the economy? If you raise it to US$15 an hour, they're doing all of those things.”
The Center on Wage and Employment Dynamics at Berkeley university recently updated its analysis of McDonald’s workers who had their minimum wages raised to US$15 or more. What it found was that fewer McDonald’s workers quit their jobs.
Something for President Trump to bear in mind next time he’s slinging fries in McDonald’s.
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