Doubling the federal minimum wage is a popular idea these days.
Support for a $15 federal minimum wage has gone mainstream with Democrats.
During a forum with union workers over the weekend, six Democratic 2020 presidential hopefuls publicly endorsed the idea of raising the federal minimum wage — pushing the issue to the forefront of the presidential primary race.
The current minimum wage has been stuck at $7.25 an hour since 2009, and workers are increasingly frustrated to see their paychecks grow so little as the economy is thriving.
“I stand strongly with you in your fight for $15,” Sen. Amy Klobuchar (D-MN) said during the candidate forum in Las Vegas, which was organized by the Service Employees International Union and the Center for American Progress Action Fund. “We must get a $15 federal minimum wage.”
Klobuchar wasn’t the only candidate to make that endorsement — all the others who participated in the event did too. Sens. Kamala Harris and Elizabeth Warren, former Rep. Beto O’Rourke, former Housing and Urban Development (HUD) Secretary Julián Castro, and former Colorado Gov. John Hickenlooper all promised that if they are elected president in 2020, workers in every state will earn no less than $15 an hour.
Hickenlooper went even further than the rest: “Where living costs are higher, like New York, Los Angeles, and maybe Las Vegas, we will go above $15 an hour.”
These enthusiastic endorsements from Hickenlooper and Klobuchar, who have positioned themselves as centrists in a field of progressive candidates, shows how far elected Democrats have moved on an issue that has divided lawmakers for more than a decade. Six states and the District of Columbia recently hiked minimum pay to $15 an hour, and Democrats in Congress are considering a bill that would do the same. With so many presidential contenders on board too, the chances of doubling the federal minimum wage are better than ever.
Raising the minimum wage is a popular policy
It makes sense that presidential candidates are embracing a $15 wage these days: American voters want lawmakers to increase minimum pay. Poll after poll shows widespread support for raising the federal minimum pay rate, even among Republican voters. And a majority of voters want at least $15 an hour.
Fast-food workers across the country have done the most to make this happen. Within the past five years, as part of the “Fight for $15” movement, they’ve transformed an improbable proposal into a popular policy — one that addresses, in part, the slow wage growth American workers are experiencing.
Fast-food workers urged state lawmakers in California to pass a bill, and in 2016 they did, making California the first state to raise minimum pay to $15 an hour. Then came Massachusetts, New York, DC, Illinois, and New Jersey. In March, Maryland became the sixth state to raise its minimum wage to $15 an hour.
Now, for the first time, Democrats in Congress are pushing for a $15 minimum wage too.
In January, House Democrats introduced the Raise the Wage Act, which would eventually double the federal minimum wage by 2024. The law would also tie future changes to changes in median workers’ pay. So if middle-class wages go up — or down — so would the minimum wage.
The bill, which has more than 200 co-sponsors (all Democrats), would also phase out the lower minimum wage for tipped workers such as restaurant servers and valets, which has been $2.13 an hour since 1996.
Business groups, meanwhile, are not happy about the fight for $15. Neither are their Republican allies in Congress, who have long pushed back against any effort to raise the federal minimum wage, claiming it would destroy small businesses and trigger massive job losses.
A few Democrats are torn on how much to raise wages. Rep. Terri Sewell (D-AL) introduced an alternative bill in April, which would create different minimum wage levels depending on the region. Only businesses in the most expensive areas would have to pay workers at least $15 an hour by 2024. So far, only 11 other House Democrats support the bill, and no Republicans are interested in it either.
But controversy over raising the federal minimum wage is about more than just politics. There’s also plenty of debate about the economic impact of such a change.
What the research says
There are few topics US economists have researched more than the impact of raising a minimum wage.
Their findings have varied over the past 30 years, but there are two things most mainstream economists now agree on. First, that raising the minimum wage increases the average income of low-wage workers, lifting many out of poverty (depending on how big the raise is). Second, that raising the minimum wage likely causes some job losses.
The remaining disagreement revolves around how extreme the job cuts would be. Some research suggests hundreds of thousands of American workers could lose their jobs with a modest increase in the minimum wage.
During a House hearing in February, Douglas Holtz-Eakin, an economist at the conservative American Action Forum, pointed to a 2014 study from the Congressional Budget Office, which estimated that a $10.10 federal wage floor could lead to about 500,000 lost jobs because higher labor costs would lead some employers to scale back their staff.
Other research concludes that increasing the minimum wage has an insignificant impact on employment, or none at all.
The best way to evaluate the different conclusions is to analyze all the research findings together — what scientists call a “meta-analysis.” And the most recent ones suggest that the most likely impact on employment is minimal.
For example, a 2016 study by economists at Michigan State University crunched data from 60 research studies on the minimum wage in the United States since 2001. They concluded that a 10 percent increase in the minimum wage would likely reduce employment in low-wage industries by 0.5 to 1.2 percent.
Another meta-analysis comes in a new research paper by economists at the University of Massachusetts, University College London, and the Economic Policy Institute. They studied data from 138 cities and states that raised the minimum pay between 1979 and 2016 and found that low-wage workers received a 7 percent pay bump after the minimum wage law went into effect, but that there was little or no change in employment.
In a 2018 working paper, soon to be published in the American Economic Journal: Applied Economics, economist Arindrajit Dube shows that raising the minimum wage significantly reduces the number of families living in poverty. For example, he concludes that a $12 minimum wage in 2017 would have lifted 6.2 million people out of poverty.
But businesses, for the most part, really dislike the idea of raising the minimum wage. The US Chamber of Commerce and the Restaurant Association are just a few of the big industry groups that have lobbied aggressively against past attempts to do so.
But even corporate America is less resistant to the idea than it was before.
Last month, McDonald’s said it would no longer hire lobbyists to oppose minimum wage increases at the state and federal levels. And Amazon CEO Jeff Bezos said he now supports a $15 federal minimum wage.
Support is so mainstream now that the obvious question is who opposes a $15 minimum wage?
Not all of the 20-plus 2020 Democratic primary candidates participated in Saturday’s forum, so we don’t know everyone’s positions on this just yet. Sen. Bernie Sanders supports a $15 wage — he sponsored the Senate version of the Raise the Wage Act. But South Bend, Indiana, Mayor Pete Buttigieg hasn’t taken a firm position on it. Former Vice President Joe Biden, who recently joined the race, endorsed a $15 minimum wage on Monday. Soon enough, everyone else will feel the pressure to decide too.
Update: This story has been updated to reflect Vice President Joe Biden’s recent endorsement of a $15 federal minimum wage.