Congress votes to raise minimum wage in steps to $15 per hour by 2025

The US House of Representatives passed HR 582 on Thursday, July 18th, 2019 to increase the federal minimum wage to $15 dollar per hours by 2025. The vote was 231 to 199. It also abolishes the "tipped" wage.  The bill, called "The raise the wage act" would raise the wage in steps over a six year period to $15.00, tie future wage increases to median wage growth and repeal the "tipped" and "training" wages for all workers.

https://www.cnbc.com/2019/07/18/house-passes-raise-the-wage-act-15-per-hour-minimum-wage-bill.html

The Congressional Budget Office predicted 17 million people would be directly affected by the measure.  Ten million more are expected to be a bump up if they are near $15 dollars already.

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In related news, The Congressional Budget Office release a report on July 8th, 2019, examine the effects of the "Raise the Wage Act." They determined that the bill would increase the wages of about 17 million people directly and 10 million more indirectly.  It would lift 1.3 million people out of poverty.  The report estimates that 1.3 million people would lose their jobs. The economy creates about 2 million new jobs each year.

Report said the wages would come from decreased business profits and higher prices.


Interestingly, a couple states have no minimum wage: South Carolina, Mississippi, Alabama, Tennessee and Louisiana.

While Texas, Oklahoma, Iowa, Indiana, Georgia, Pennsylvania, Virginia, Utah, Wyoming, Idaho, New Hampshire, North Dakota and Wisconsin pay the federal minimum wage of $7.25.

Heidi Shierholz has been working on this issue for years.  She was chief economist in the department of labor under the Obama administration. She is currently a senior economist at the Economic Policy Institute. Michael Farren is at the Mercator center.

https://www.c-span.org/video/?462584-4/washington-journal-heidi-shierholz-michael-farren-discuss-efforts-raise-federal-minimum-wage

They argue about the studies on minimum wages for a little bit. Both debate the quality of the studies used by the CBO for the estimate.

Darren argues that economic supply and demand will set wages based on a workers value to the firm. Shierholz discusses that employers are suppressing wages, so we can raise the minimum wages without increasing unemployment.

Both economists agreed that raise the wage would also push up other wages. Sheirholz noted it would increase demand as well.

Sheirholz stated she was not afraid of automation while Farren worried about the effect of the wage.

A caller mentioned that raising the minimum wage would lessen the dependency on federal and state programs..