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.