One of President Biden’s and his party’s main goals has been to increase the minimum wage that has been stagnant from 2009. It is a lofty goal and yet is essential especially for the frontline workers who labored through the pandemic while earning minimum wages although some of the national companies that they worked for saw soaring profits.
The president and Democrats believe that the increase in wages to $15 in steps over a period of four years will provide a decent living standard for a family of four. It would also acknowledge the services of essential workers in grocery stores and warehouses who worked through the pandemic. It would give a boost to the economy as these workers who were low wage for over a decade could spend more instead of using all their wages to meet their minimum basic needs.
However, other economists and many members of the GOP feel that the increase in minimum wages across the country will sound a death knell for small businesses as well as rural economies. They also say that the cost of living differs across the length and breadth of the nation and hence that would affect businesses and workers negatively and positively.
Many states including California, Florida and Massachusetts are steadily moving towards the goal of achieving the minimum wage target of $15 per hour. However, Bharat Ramamurti, deputy director, National Economic Council believes that all workers, irrespective of their geographic location, should receive the minimum wage.
Some large national companies already pay the minimum wage, but it could be difficult for small businesses. Some congresspersons fear the loss of jobs in the rural pockets they represent.
Michael Reich, an economics professor at UCLA, Berkley has said in a paper that it would have a positive effect on the federal budget by 2025.
There are pluses and minuses in the minimum wage increase. Statistics show that although there will be job losses for quite a few Americans, many others will gain a lot and improve their standard of living.