Enero 31, 2021 – 12:30 p. m.
Doubling the minimum wage to lift millions of Americans out of poverty. Joe Biden’s ambitious proposal, already on the desk of legislators, could result in a social revolution for the poorest in the United States, a country with glaring socioeconomic disparities.
“Even before the pandemic, the federal minimum wage of $ 7.25 (per hour) was economically and morally indefensible,” said Virginia Democratic lawmaker Bobby Scott when introducing the bill.
This has not changed one iota since July 24, 2009.
Although very popular with the population – even in the ranks of the Republicans – and supported for more than a decade by the unions, the initiative has met with opposition from the Republicans under pressure from company lobbies who 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 called the $ 7.25 “starvation wages.”
“In the richest country in the world, when you work 40 hours a week, you should not live in poverty,” insisted the senator from Vermont who is promoting the project and hopes to convince skeptics.
The economic crisis caused by the coronavirus pandemic mainly affects small companies, especially in the gastronomic and services sector. Therefore, they do not look favorably on this proposal included in the gigantic $ 1.9 billion rescue plan.
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The vice president of the National Federation of Restaurants (NRA), Sean Kennedy, has given a new welcome to the project, especially because he understands the obligation to pay this minimum wage in full, regardless of tips imposed on customers. These allow bosses to pay employees just two or three dollars when these famous “tips” fill the gap of $ 7.25.
This measure “will imply insurmountable costs” for many establishments that will have no choice but to lay off more employees or close permanently, predicts Kennedy.
The new Treasury Secretary, Janet Yellen, responds that “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 is implemented, he argued, aiming for a gradual increase ($ 15 by 2025) that gives “enough time to adapt.”
Is it good or bad for the economy? This debate was harshly installed for centuries among economists and has not been resolved, especially since the economic reality is not the same in New York (many opportunities, high cost of living …) or in Mississippi (less dense economic fabric, much cheaper life …).
Virtuous circle ?
But Joe Biden’s administration 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, some 1.6 million workers had wages at or below the federal minimum, that is, 1.9% of all workers paid by the hour, according to the US Bureau of Statistics.
That’s a small number because the minimum wage, introduced in 1938 by then-President Franklin Roosevelt during the Great Depression, has become theoretical over time.
While southern and central states generally apply the minimum wage, eastern states and the wealthy like California have set a much higher rate – $ 12, $ 13, or even $ 15.
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And big companies like online commerce giant Amazon and coffee shop chain Starbucks are already paying a $ 15 salary to attract labor.
The salary of Maggie Breshears, an employee of the Fred Meyer group in Seattle, thus amounts to $ 17.59 compared to $ 10 in 2013.
“When you can provide someone with a job, you have to pay them a living wage to live,” he says.
By simple majority?
A wage of $ 15 an hour by 2025 would increase the wages of 27.3 million people and lift 1.3 million families out of poverty, the Congressional Budget Office calculated. But he also estimates that this could lead to the loss of 1.3 million jobs.
For Gregory Daco, chief economist at Oxford Economics, beyond the potential impact, the proposal illustrates the social change desired by Joe Biden.
This “confirms the willingness of an administration to focus more on the social and racial inequalities that had caused strong tensions last year” during the administration of Republican magnate Donald Trump, he stresses.
The proposal will be difficult to pass even if Democrats hold a majority in both houses.
However, Bernie Sanders has already mentioned the possibility of resorting to a device to ratify the law by simple majority.