In addition to adding $108 billion (this estimate) to employer (mostly small and very small employers) costs, employers will pay an additional $8,032,500,000 in Social Security and Medicare payroll taxes plus any additional state payroll taxes and employee benefit costs related to pay.
Finally, some “experts” admit a $15.00 minimum wage has an impact beyond those earning less than $15.00 an hour. The word “just above” is relative. It is nearly unlimited as a result of a domino affect. IT’S CALLED PAY COMPRESSION and it’s real.
No impact on prices and inflation? I wonder!
- The Raise the Wage Act of 2021, which phases in a $15 minimum wage by 2025, would raise the earnings of 32 million workers, or 21% of the workforce. Affected workers include those who would see their wages rise as the new minimum wage rate exceeds their current hourly pay and those who have a wage rate just above the new minimum wage who would receive a raise as employer pay scales are adjusted upward to reflect the new minimum wage.
- On average, an affected worker who works year round would see an annual pay increase of about $3,300. In total, a $15 minimum wage would provide over $108 billion in additional wages in 2025 to affected workers. SOURCE: Economic Policy Institute.
Glad to see raising the minimum wage is going to help so many workers. In a country with a GDP of over 20 trillion dollars, it is about time the lower wage worker benefited from the improvements in productivity over the last 40 years. Not sure when we will get to a $15 minimum wage, but it should be indexed to the CPI just like SS and other retirement plans.