Fight for $15
The Fight for $15 is an American political movement advocating for the minimum wage to be raised to USD$15 per hour. The federal minimum wage was last set at $7.25 per hour in 2009. The movement has involved strikes by child care, home healthcare, airport, gas station, convenience store, and fast food workers for increased wages and the right to form a labor union. The "Fight for $15" movement started in 2012, in response to workers' inability to cover their costs on such a low salary, as well as the stressful work conditions of many of the service jobs which pay the minimum wage.
The movement has seen successes on the state and local level. California, Massachusetts, New York (downstate only), Maryland, New Jersey, Illinois, Connecticut, Florida, Delaware, and Nebraska have passed laws that gradually raise their state minimum wage to at least $15 per hour.[4][5] Major cities such as San Francisco, New York City and Seattle, where the cost of living is significantly higher, have already raised their municipal minimum wage to $15 per hour with some exceptions. On the federal level, the $15 proposal has become significantly more popular among Democratic politicians in the past few years, and was added to the party's platform in 2016 after Bernie Sanders advocated for it in his presidential campaign.[6]
In 2019, the Democratic-controlled House of Representatives passed the Raise the Wage Act, which would have gradually raised the minimum wage to $15 per hour. It was not taken up in the Republican-controlled Senate. In January 2021, Democrats in the Senate and House of Representatives reintroduced the bill.[7] In February 2021, the Congressional Budget Office released a report on the Raise the Wage Act of 2021 which estimated that incrementally raising the federal minimum wage to $15 an hour by 2025 would benefit 17 million workers, but would also reduce employment by 1.4 million people.[8][9][10] On February 27, 2021, the Democratic-controlled House passed the American Rescue Plan pandemic relief package, which included a gradual minimum wage increase to $15 per hour.[11] The measure was ultimately removed from the Senate version of the bill.[12]
Affected industries[edit]
Restaurant industry[edit]
The impact on employers and workers within the restaurant industry is a major focus of the Fight for $15 movement. According to the U.S. Bureau of Labor Statistics, restaurants and other food services employ about sixty percent of all workers paid at or below the minimum wage, as of 2018.[59] Common responses to minimum wage increases include restaurant operators cutting employee hours and raising menu prices.[60] In cities such as New York City and Seattle that have already implemented a $15 minimum wage for most businesses, menu price increases have been a trend.[61] Politicians, economists, restaurant owners and workers continue to debate the economic viability and benefits of a federally mandated $15 minimum wage.
Economists of the Economic Policy Institute have largely come out in support of a $15 federal minimum wage.[62] Their outlined plan entails a gradual increase, reaching $15 by 2024. Fast-food restaurants are a key focus in the Fight for $15 movement. Some argue that turnover reductions, trend increases in sales growth, and modest annual price increases would allow for this bump in minimum wage without forcing the restaurants to shed employees.[63] While most advocates acknowledge rising prices as a result of the higher wages, they generally accept this outcome and believe it will not have a major negative impact on dining/overall sales. Advocates for the movement also point to research that finds the average estimated employment effect of minimum wage increases to be very small.[64]
A common argument against raising the minimum wage in restaurants to $15 is that it could cause cuts to employee hours, as well as potential layoffs or restaurant closures.[60]
Waiters, bartenders, and other food service workers who primarily work for tips may utilize the federal tipped minimum wage, which is currently $2.13 an hour. A tip credit is the difference between their minimum wage and the cash wage an employee is paid during a pay period, accounting for tips that do not add up to the federal minimum wage. Many advocates for a $15 minimum wage, including restaurant owners, believe that restaurants should get rid of the tip credit pay structure, as they find it is not beneficial to low wage restaurant workers.[65]
Retail[edit]
According to the U.S. Bureau of Labor Statistics, 11,302,000 workers in the retail industry were paid hourly rates at or below the federal minimum wage in 2018.[66] Retail workers account for a significant portion of those affected by the minimum wage, as major retailers such as Target and Walmart are a big focus on this issue. Recently, some companies, including Target and Best Buy, have committed to boost their starting hourly wage to $15 an hour, regardless of local/federal minimum wage mandates.[67][68] As pressure grows, more stores are increasing their hourly rates both to satisfy political/social demands, while also benefiting from happier, more productive workers.[69]
Health care[edit]
Health care is one of the largest industries in the United States, with about 18.6 million workers as of 2019 and the numbers are growing.[70] According to The Brookings Institution, there were nearly 7 million people in low-paid health jobs in 2019 in the United States.[71] The median wage was $13.48 an hour for jobs in health care support, service, and direct care.[71] Given the discrepancy between wages in these categories and significantly higher pay for doctors and nurses, the fight for a living wage in health care has gained support.
Criticism and responses[edit]
Arguments for and against the movement are the same as arguments for and against the minimum wage. Opponents generally claim that higher wages will result in fewer working hours for each worker (nullifying the increased rate), increased unemployment, and higher consumer prices. Proponents generally point to the benefits for workers who earn a higher hourly rate, and claim that the higher prices are tolerable and promote a more equitable distribution of wealth. Economists disagree whether higher minimum wages cause unemployment among low-wage workers. In 2017 and 2018, the unemployment rate was very low nationally, and several states hit record low unemployment levels, with no clear pattern across high-wage vs. low-wage states.[72]
Former McDonald's CEO and President Ed Rensi cited the Fight for $15 movement as the reason for the installation of automated ordering kiosks at the chain's restaurants nationwide, which he says is an example of higher minimum wages causing unemployment.[73] Increased automation is treated as a benefit of a higher minimum wage by some advocates,[74] and economists generally view automation as a net positive because it increases labor productivity and allows employers to pay higher wages to workers because they are shifted to higher-value tasks.
Rensi and other critics say that some businesses, especially small businesses, cannot afford the capital investments needed for automation, or simply cannot afford higher labor costs. As a result, they are either driven out of business or relocate to lower-wage jurisdictions. Such cases are portrayed on the advocacy web site Faces of $15. Other businesses, including Amazon.com,[75] have voluntarily pledged to pay workers no less than $15 per hour (though through Amazon Robotics the company is also investing heavily in automation). Observers say businesses do this to reduce turnover and training costs, to compete for quality workers in a tight labor market, and to avoid negative publicity.
Other critics claim that an increased minimum wage would accelerate the speed of automation and displacement of minimum wage jobs, as employers replace low-skilled workers with machines, AI, and self-driving vehicles in common job sectors: retail, fast food service, call centers, trucking, and accounting. Universal basic income has been proposed as a progressive alternative.[76]
Estimated economic impact of federal $15 wage[edit]
In February 2021, the Congressional Budget Office released a report on the Raise the Wage Act of 2021 which estimated that incrementally raising the federal minimum wage to $15 an hour by 2025 would benefit 17 million workers, but would also reduce employment by 1.4 million people.[8][9][10] It would also lift 0.9 million people out of poverty, possibly raise wages for an additional 10 million workers, and increase the federal budget deficit by $54 billion over ten years by increasing the cost of goods and services paid for by the federal government.[8][9][10] It would also cause prices to rise, and overall economic output to decrease slightly over the next 10 years.[8][90]
A few economists have disputed some of the report's findings. University of California, Berkeley's Michael Reich has estimated that rather than increasing the deficit, a $15 minimum wage could increase federal tax revenue by $65 billion annually, because of increased payroll taxes and government spending on safety net programs is likely to decrease.[10][91] Arindrajit Dube stated that he thought the report's examination of relevant studies was not as comprehensive as a report he recently did and estimated that the job losses would be less than 500,000.[92][93]