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The Raise the Wage Act, Explained

The federal minimum wage has been stuck at $7.25 an hour since 2009, even as the cost of living in the United States continues to rise. This is the longest we have gone without an increase to the minimum wage since 1938, and workers making the minimum wage now are earning less than they would have 50 years ago. The minimum wage for tipped workers is set even lower at $2.13 an hour, a harmful subminimum wage rooted in racism against the workers of color who disproportionately work in tipped industries. Many workers with disabilities are also subject to discriminatory subminimum wages - as little as $1.00 an hour - based on the incorrect and offensive assumption that these workers are incapable of productive work.

After years of sustained pressure, the workers and labor activists leading the Fight for $15 movement have won raises for 22 million workers nationwide through increases in the minimum wage at the local and state levels—but it’s time to do the same for everyone. When these workers first started calling for $15 and a union, there were only a handful of progressive legislators who embraced their demand at the federal level. Nearly a decade later, these workers have succeeded in making a $15 an hour minimum wage a mainstream policy in the Democratic party, and including it in President Biden’s campaign platform. The bill even passed the House last Congress, only to be stalled in Mitch McConnell’s Senate. Now, with a governing trifecta, it’s time to make sure Democrats deliver on their promise of a $15 an hour minimum wage.

Early in 2021, The Raise the Wage Act (H.R. 603, S. 53) was reintroduced in both the House and Senate by Reps. Bobby Scott (VA-03) and Sen. Bernie Sanders (D-VT). Read on to learn more, make sure your MoCs are cosponsors of the Raise the Wage Act, and ensure Democrats fulfill their promise to get this done.

What’s in the Raise the Wage Act?

The Raise the Wage Act would finally set us on a path to ensuring that all working people earn a living wage. The Raise the Wage Act would:

  • Gradually raise the federal minimum wage to $15 an hour by 2025.
  • After 2025, automatically increase the minimum wage each year at the same rate that median wages increase. The automatic increase mechanism is called “indexing,” and it’s critical to set wages on a long-term upward trend, and make sure that we don’t have to constantly come back to this issue in the future and fight for new increases.
  • Gradually eliminate the lower, subminimum wages for disabled, youth, and tipped workers, which contribute to wage theft, and exacerbate the wage gaps that harm women and Black workers. As a result, almost 32 million workers would see wage increases—21% of the entire workforce—and Black and Latino workers, single mothers, and workers close to the poverty line, would benefit in particular.

Why is the Raise the Wage Act Important?

Well, it’s both good politics and good policy. Raising the minimum wage to $15 an hour has the support of a large majority of voters in battleground congressional districts, including white and non-white voters, Independents, voters in cities, suburbs, and rural areas, and voters up and down the income scale. But more importantly, it is an idea that will only become more urgent as the cost of living increases across the entire country.

Right now, $15 an hour is barely enough for self-sufficiency in a lot of high-cost areas. But by 2025, $15 an hour will be the bare minimum a single adult with no children will be able to earn to attain a “secure yet modest” standard of living anywhere in the United States, according to the Economic Policy Institute’s Family Budget Calculator. According to the National Low Income Housing Coalition, the average full-time minimum wage earner would have to work 97 hours a week to afford a modest two-bedroom rental home. If we fail to act, working families will continue to fall further behind.

You can use this map from EPI to see how a $15 minimum wage would help workers in your Congressional district!

Raising the Minimum Wage is a Racial Justice Issue

The history of minimum wage policy in the United States is a story of racist policies at the federal and state level, intentionally designed to exclude workers of color, in particular Black workers, and permanently carve them out of economic protections being afforded to white workers.

The first federal minimum wage in the US was enacted in 1938. It set a minimum wage of $0.25 an hour as part of the Fair Labor Standards Act (FLSA), a component of President Roosevelt’s New Deal. Like most legislation from this era, it was a compromise with racist southern Democrats who successfully excluded the disproportionately Black workers in the agricultural and domestic work industries. Since then, workers and advocates have been successful in incrementally expanding who is covered by the minimum wage, but the fight to fully close this Jim Crow loophole continues.

Today, pushing to expand and increase the minimum wage remains a racial justice issue. Minimum wage earners are disproportionately workers of color, so raising the minimum wage has enormous potential to close the racial pay gap. Black and Latinx workers are paid 10-15% less than white workers, meaning they would experience the greatest benefits of a $15 an hour minimum wage. Black women relying on tips in the restaurant industry earn $5 an hour less than their white male counterparts, a direct result of the racial discrimination that is baked into the lower, tipped minimum wage. It’s long past time to correct these injustices.

Just like previous efforts to increase and expand the minimum wage, the Raise the Wage Act is another opportunity to help close the racial pay gap, create a more equitable economy, and provide an economic boost to workers of color.

So, How are we Going to Pass the Bill?

The Raise the Wage Act has been reintroduced in both the House and Senate, so it’s important you make sure your MoCs are cosponsors of the bill (H.R. 603, S. 53). Fortunately, President Biden also included the Raise the Wage Act in his American Rescue Plan, and House Democrats followed suit when they drafted the COVID-19 relief legislation - after some pressure from progressives. Democrats are planning to pass this relief package through budget reconciliation to avoid a Republican filibuster in the Senate (read more about that process here).

We don’t know yet if that effort will be successful, or if Democrats will allow the Senate Parliamentarian to strip out the provision under the Byrd Rule. Regardless of what the Senate Parliamentarian says, the House should keep the Raise the Wage Act in their version of the American Relief Plan, and pass the most comprehensive version of relief legislation possible.

Senate Democrats can and should avoid this potential roadblock by simply eliminating the filibuster and taking away Mitch McConnell’s power to veto the progressive agenda.

Increasing the minimum wage is a necessary response to the current economic crisis that has fallen hardest on frontline workers and those already facing economic hardship. Democratic Senators should use every tool available to them to swiftly pass this urgently needed legislation.