Double the minimum wage to lift millions of Americans out of poverty. Joe Biden’s ambitious proposal, already on the legislators’ table, could result in a social revolution for the poorest in the United States, a country with striking socio-economic disparities.
“Even before the pandemic, the federal minimum wage of $ 7.25 (per hour) was economically and morally indefensible,” said Bobby Scott, a Virginia Democratic lawmaker who introduced the bill.
There has been no change since July 24, 2009.
Although appreciated among the population – even in the ranks of Republicans – and defended for more than a decade by unions, the initiative met opposition from Republicans, under pressure from companies that reject the additional costs.
– “It is not a radical ideal” –
“This is not a radical ideal,” said Bernie Sanders, a former progressive presidential candidate who considers the $ 7.25 a “starvation wage”.
“In the richest country in the world, when you work 40 hours a week, you shouldn’t live in poverty,” insisted the Vermont senator who drives the bill and hopes to convince skeptics.
The economic crisis caused by the coronavirus pandemic affects mainly small businesses, especially in the food and service sectors. Therefore, they do not welcome this proposal included in the gigantic stimulus plan worth 1.9 billion dollars.
For the new Treasury secretary, Janet Yellen, “raising the minimum wage will lift tens of millions of Americans out of poverty and create opportunities for countless small businesses across the country.”
It all depends on how it will be implemented, she argued, aiming for a gradual increase ($ 15 by 2025) that provides “enough time to adapt”. Is this good or bad for the economy?
This topic has been debated for centuries among economists without a conclusion, mainly because the economic reality is not the same in New York (many opportunities, high cost of living …) or in Mississippi (less dense economic situation, lower cost of living … ).
– Virtuous circle ? –
But Joe Biden’s management highlights the virtuous cycle: paying those with the lowest wages would generate billions of dollars in additional consumer spending on goods and services provided by small businesses.
In 2019, about 1.6 million workers had wages equal to or below the federal minimum, that is, 1.9% of all hourly workers, according to the US Bureau of Statistics.
It is a small number because the minimum wage, introduced in 1938 by then President Franklin Roosevelt during the Great Depression, has become theoretical over time.
Although southern and central states generally apply the minimum wage, eastern states and wealthy states like California have set a much higher rate: 12, 13 or even 15 dollars.
Big companies like online commerce giant Amazon and the Starbucks chain of cafes are already paying a $ 15 wage to their workforce.
The salary of Maggie Breshears, an employee of the Fred Meyer group in Seattle, amounts to $ 17.59 compared to $ 10 in 2013.
“When you give someone a job, you have to pay a minimum wage to live,” she says.
– By simple majority? –
A $ 15 hourly wage through 2025 would increase the wages of 27.3 million people and lift 1.3 million families out of poverty, calculated the Congressional Budget Office. However, the cabinet estimates that this could lead to the loss of 1.3 million jobs.
For Gregory Daco, chief economist at Oxford Economics, in addition to the potential impact, the proposal illustrates the social change desired by Joe Biden.
This “confirms a government’s willingness to focus on the social and racial inequalities that caused strong tensions last year” during the government of Republican tycoon Donald Trump, he emphasized.
The proposal will be difficult to pass, even if Democrats have a majority in both houses.
However, Bernie Sanders has already mentioned the possibility of using a device to ratify the law by a simple majority.
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