CNN
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A bill to raise the federal minimum wage to $15 an hour from $7.25 is back – but you might be surprised at who’s leading the charge: Republican Senator Josh Hawley of Missouri.
Shifts in state and local minimum wages, however, as well as the broader economy, show how Hawley’s involvement makes sense, both for his home state and for the country. And experts say having a conservative advocate sponsoring the bill could help the chances of finally getting a federal wage hike for the first time in 16 years.
“Given the fact that it’s a Republican leading this legislation, there’s certainly a different tone here, and a different group of people thinking about it than in the past,” said Rebekah Paxton, research director at Employment Policies Institute, a conservative think tank that opposes raising the minimum wage, arguing it will cost the jobs of lower-paid workers.
Thirty-one states already require businesses to pay most workers above the federal $7.25 minimum – including Missouri. That might be one reason why Hawley’s behind the bill.
Come January 1, Missouri’s minimum wage will rise to $15 an hour. A higher starting wage means that businesses looking to expand nationwide might instead opt for a state that has a cheaper wage floor. A national $15 per hour wage would level the playing field, making Missouri competitive with places where businesses can legally pay less.
“I think (Hawley’s sponsorship) is an admission that minimum wage increases are very popular,” said Ben Zipperer, senior economist with the Economic Policy Institute, a liberal think tank that supports a higher minimum wage.
“I would like to be optimistic about this. I do think it’s an important recognition that the problem with low pay continues to be a concern,” he said.
The current federal minimum wage of $7.25 an hour was set in July 2009, according to the Department of Labor, and has not changed since.
But thanks to inflation – including a surge in prices during the pandemic – that wage has depreciated. People earning $7.25 in 2009 would need to earn $10.82 today to have the same buying power, according to a Bureau of Labor Statistics calculator that uses the Consumer Price Index as an inflation reference.
And while inflation is closer to the Federal Reserve’s 2% target now, the accumulation of more than a decade and a half of price increases means that Americans simply can’t afford the same kind of life now that $7.25 an hour bought in 2009.
Hawley alluded to that erosion in a statement about the bill.
“For decades, working Americans have seen their wages flatline. One major culprit of this is the failure of the federal minimum wage to keep up with the economic reality facing hardworking Americans every day. This bipartisan legislation would ensure that workers across America benefit from higher wages,” Hawley said in a statement. (Senator Peter Welch, a Vermont Democratic, is a co-sponsor.)
Hawley’s press office did not respond to a request for further comment about the bill.
In 10 states, as well as the District of Columbia, workers already make $15 an hour or more. In several more states, the rates could be higher than that next year, depending on inflation adjustments.
All those states have Democratic senators likely to support a federal wage hike, excepting only Republican Senator Susan Collins of Maine.
In fact, Bureau of Labor Statistics data shows that in 2023, the most recent year with information, only 870,000 workers earn the $7.25 an hour minimum or less (the less is allowed for workers who receive tip income or some workers with disability). That’s only about 1% of the 80 million hourly workers nationwide.
Far more people, however, make under $15 an hour – about 14 million, Zipperer said.
“The economy has basically moved on” from wages that low, he added. But a pay increase to $15 an hour could do a lot to help those folks.
“Minimum wage bills are always going to affect a minority of the work force,” he said. “Still, that’s nothing to sneeze at.”
But Paxton, of the conservative Employment Policies Institute, said a higher minimum wage could actually hurt those workers by cutting into the number of jobs or hours worked. With human workers earning bigger paychecks, employers could turn to automation or artificial intelligence. Already, AI leaders have warned that new advances in the technology could slash jobs for white-collar workers.
“It’s a popular thing. People want to see workers earn more money,” Paxton said. “Yes, it could boost wages, but it also could kill jobs for a sizable part of the workforce. There’s a tradeoff we think he (Senator Hawley) is ignoring.”
