According to the Economic Policy Institute:
The federal minimum hourly wage is just $7.25 and has not increased since 2009. The Raise the Wage Act of 2021, introduced in the U.S. House of Representatives on January 26, 2021, would gradually raise the federal minimum wage to $15 an hour by 2025.
EPI research shows that raising the federal minimum wage to $15 an hour by 2025 would lift pay for nearly 32 million workers across the country—that’s 21% of the U.S. workforce. The increases would provide an additional $107 billion in wages for the country’s lowest-paid workers, with the average affected worker who works year-round receiving an extra $3,300 a year.
Shouldn’t we ask where the $107 billion in higher wages plus higher payroll costs) will come from?
It seems like there are limited choices or combinations thereof.
- More automation and fewer MW jobs
- Higher prices for goods and services (mostly services) – inflation
- Less net income/ profit for mostly small and medium businesses
Increased demand for goods and services drives inflation. Surely there is more to this equation than just the minimum wage workers.