Currently, 29 states have minimum wages above the federal level of $7.25 per hour (which has not changed since 2009). There is a major push by many Democrats, unions, and progressive interest groups to raise the minimum wage to $15 per hour. Between $7.25 and $15 there is a great deal of room for negotiation. It appears that a bipartisan agreement somewhere in the middle is likely.
Many arguing against raising the minimum wage to $15 per hour point to potential job losses resulting from businesses deciding not to hire a new employee they cannot afford. Different analyses come to different conclusions about the level of potential job losses. A recent report from the Congressional Budget Office (CBO) estimated 1.4 million jobs would be lost (0.9 percent of employment) by the time the federal minimum wage reaches $15 in 2025. Other experts argue that the CBO estimate’s flawed methodology inflates the job losses. Some analyses applying different methods to CBO’s evidence conclude that the job losses from raising to $15 per hour would be just under 500,000. Most agree that a wage hike is also likely to raise the prices of goods and services.
On January 26, 2021, Senator Bernie Sanders (I-V) introduced the Raise the Wage Act of 2021 with 37 Democratic co-sponsors. The bill would raise the federal minimum wage, in annual increments, to $15 per hour by June 2025 and then adjust it to increase at the same rate as median hourly wages.
Republicans have unveiled two minimum wage bills in response to the Raise the Wage Act. Senators Mitt Romney (R-UT) and Tom Cotton (R-AR) propose a $10 federal minimum wage, to be implemented over the course of four years with a slower, phased approach for small businesses. Their bill also requires employers to use the federal government’s E-Verify program to ensure they are not hiring undocumented workers.
Senator Josh Hawley (R-MO) released another alternative to an increase in the minimum wage: a tax credit for those who make less than $16.50 an hour. The credit would be applied based on the number of hours a person worked and would be available only to those with an American social security number, barring non-US citizens and undocumented workers. A full-time worker could get up to $4,680 in tax credits a year.