The Senate voted against including a minimum wage increase in the American Rescue Plan in March, and as long as Republicans have the option of filibustering it, they will block any meaningful increase in what’s now a poverty-level federal minimum wage. But because $7.25 an hour is a poverty-level wage—and because raising it is proven popular with voters—Democrats need to find a way to make it happen, and happen in a form that isn’t an insult to the workers such a policy should be helping.
“When you think about raising the minimum wage, it’s really about raising the opportunity for families to earn a living,” Labor Secretary Marty Walsh told MSNBC’s Ali Velshi on Saturday. “Most families can’t live on $7 an hour—no family can live on $7 an hour. It’s pretty hard to live on $15 an hour.”
“The president’s committed to raising the minimum wage,” Walsh continued. “I’m committed to raising the minimum wage, there are members of Congress committed to raising the minimum wage.”
What a minimum wage increase looks like is the big question. The Raise the Wage Act of 2021 would raise it in steps, going from $7.25 to $9.50 later in 2021, then $11 in 2022, $12.50 in 2023, $14 in 2024, and $15 in 2025. After that, the minimum wage would be indexed to median wage growth, so that we wouldn’t again have a minimum wage that hadn’t changed in more than a decade thanks to Republican obstruction. Importantly, the Raise the Wage Act would also raise the tipped subminimum wage from $2.13 an hour, where it has been since 1991, bringing it equal with the full minimum wage in 2027; the much less frequently used youth wage would also match the minimum wage in 2027.
One alternative you’ll hear mentioned a lot is a regional minimum wage, with lower-cost states having a lower minimum wage than higher-cost ones. There are a lot of problems with this. First of all, according to the MIT Living Wage Calculator, the only state in the country in which a living wage for one adult with no children is currently below $13 an hour is South Dakota. $15 an hour in 2025 is likely to be the equivalent of $13.79 in today’s dollars. So when people tell you that $15 in 2025 is too much, too fast … they’re sure not talking about what’s fair or right.
Second, consider how many states have already raised their minimum wages—and that it’s not just deep blue and expensive states like California, New York, or Massachusetts. In 2018, voters in Arkansas and Missouri raised their states’ minimum wages to $11 in 2021 and $12 in 2023, respectively. In 2020, more than 60% of Florida voters passed an amendment raising their state’s minimum wage to $15 by 2026. The Democratic senators most likely to stand in the way of a meaningful minimum wage increase are West Virginia’s Joe Manchin and Arizona’s Kyrsten Sinema. Arizona voters in 2016 passed increases to $12 in 2020, with the minimum wage indexed to the cost of living after that. West Virginia’s minimum wage is $8.75 an hour.
But third, the history of proposals for a regional minimum wage is instructive.
“When the first federal minimum wage was being debated in the 1930s, Southern congressmen strongly opposed the federal standard, concerned that it would upset the white supremacist plantation system that dominated the South’s economy,” David Cooper and Lawrence Mishel write at the Economic Policy Institute. “In fact, Southern lawmakers insisted that the federal wage standard should be adjusted by region to account for differences in costs of living. What ultimately led to the minimum wage law’s passage as a single national wage floor was a “compromise” with Southern Democrats to exempt agriculture, restaurants, and a host of other service-sector industries that disproportionately employed Black workers. Even after it was amended in 1967 to cover more of these industries, the law still exempted most farmworkers—who today are majority Latinx—and allowed employers to pay a subminimum wage to tipped workers—who today are overwhelmingly women.”
Huh. What do you know. The early attempts for a regional minimum wage were about keeping wages low for specific people—as evidenced by the fact that the acceptable compromise was the one that wrote Black workers and Latino workers and women workers out of the policy. And once again we’re seeing efforts to keep wages low in ways that would, according to a 2019 analysis, disproportionately hurt Black workers and women of color. More than one in three of the workers who would lose out from a regional proposal similar to one suggested by Third Way would be women of color. Black workers would, on average, get half the raise they would get from the Raise the Wage Act.
Raising the minimum wage would lift hundreds of thousands of people out of poverty. The best available economic research, drawing on actual real-life minimum wage increases that have already happened, tells us that it would not cost jobs. It’s a matter of basic fairness, allowing workers to get a small share of increased productivity. By raising wages disproportionately for women and people of color, it would promote equity. It’s popular. This should be a no-brainer as an issue even for the likes of Joe Manchin and Kyrsten Sinema, and a sledgehammer for Democrats to use against Republicans, not an issue to muddle with talk of a regional increase or other insulting compromises.
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