4 Things to Know About the $15 Minimum Wage

by Mammoth Team on February 29, 2016

minimum-wage.jpgThe debate over increasing the minimum wage to $15 an hour continues to make headlines in cities and states across the country. With the $15 number having entered presidential campaigns and more cities poised to propose their own minimum wage increases, “Fight for $15” is here to stay. So how may it affect you? Here are four key things you need to know about the $15 minimum wage movement.

1. How the Movement Began

You have likely heard of demonstrations for a $15 an hour minimum wage, and if you live or work in a metropolitan area, you may have even seen them first hand. The demonstrations began in November of 2012, when fast-food workers in New York City walked off their jobs in protest of their low wages. Workers from other areas and other industries have since joined in rallying for higher wages, solidifying the cause into the “Fight for $15.”

2. Why $15 Is the Magic Number

While the majority of states have minimum wages above the federal requirement, the federal minimum wage of $7.25 hasn’t been increased since 2009. Since then, it’s lost close to ten percent of its purchasing power due to inflation, according to the Pew Research Center. Analysts, such as the National Employment Law Project, say that the rate of $15 per hour is slightly above the cost of living in many cities and note that four in ten employees in the U.S. make under that amount. And, of course, the phrase “Fight for $15” has a nice ring to it, making it an effective rallying cry.

3. Who Has Passed or Planned It

No location currently has a $15 minimum wage for all employees. Many places that have increases to a $15 minimum wage planned will only apply them to certain kinds of workers. New York State will reach that number by 2021, but only for fast-food workers and state employees. Massachusetts has a planned statewide increase to $15 as well, but only for home health care workers. Workers employed by the City will receive at least a $15 dollar minimum wage in a handful of cities across the country—Pittsburg, PA and Buffalo, NY among them.

Cities with a planned $15 minimum wage for all non-exempt employees include and Seattle (by 2017 for businesses with at least 500 U.S. employees and by 2021 for others), San Francisco (by 2018), D.C.,and Los Angeles (both by 2020).

4. Why It Is so Controversial

One concern for some regarding minimum wage increases is their possible effect on employment. Business owners unable to afford the increase say they may have to downsize the number of employees they have in order to pay the required rate and still cover other costs, and argue that the loss of employees may bring a loss in revenue. Critics of minimum wage increases point to studies that show a connection between an increase to the minimum wage and a rise in unemployment. Supporters say raising the minimum wage to $15 an hour nationally would result in nearly half a trillion dollars being pumped into the economy; giving millions of Americans more purchasing power and stimulating hiring in the process.

So, What Comes Next?

In the short term, additional states might consider raising the minimum wage for certain workers, but it’s unlikely that many states will soon require a sudden jump to $15 for all non-exempt employees. And as efforts to raise the federal minimum wage above $7.25 have so far failed, a national increase to $15 is for now almost certainly out of the question. In the long run, the political pressure behind the $15 minimum wage will likely increase as the cost of living continues to rise and more places set $15 an hour as the minimal standard.

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