An activist wears a Fight For $15 T-shirt during a news conference prior to a vote on the Raise the Wage Act on July 18, 2019 at the U.S. Capitol.Alex Wong/Getty Images
The U.S. House of Representatives on Thursday passed legislation to raise the federal minimum wage to US$15 an hour by October, 2025, a big win for workers and labour groups, even as it remained unlikely the bill would pass a Republican-controlled Senate.
The move comes at a time when the US$15 minimum wage fight has been gaining momentum around the country with several states and large private-sector employers that hire entry-level workers.
Cities and states including Seattle, San Francisco, New York State, California, Arkansas and Missouri have raised their minimum wage. Over the past year, employers such as Amazon.com Inc. and Costco Wholesale Corp. have raised their base wages to US$15 an hour while others such as Target Corp. have committed to going up to that level by the end of 2020.
Even some opposed to the move such as fast-food chain operator McDonald’s Corp. said recently it would no longer fight proposals to raise the federal minimum wage.
The country’s largest private sector employer Walmart Inc., which pays US$11 in base wages to its employees, recently said it supports raising the federal minimum wage, calling it “too low.”
The Democratic-majority House approved the legislation titled Raise the Wage Act, in a mostly partisan vote of 231-199. Only three Republicans voted for it, while six Democrats opposed it.
The bill increases entry-level wages for millions of American workers from the current US$7.25 an hour – about US$15,000 a year for someone working 40 hours a week, or about US$10,000 less than the federal poverty level for a family of four. It has remained unchanged since 2009.
Many Republicans and business groups have argued that raising the minimum wage to US$15 an hour would hurt jobs, forcing businesses to hire fewer people and replacing jobs with automation. Several Republican lawmakers cited a report from the non-partisan Congressional Budget Office last week, which estimated the move will boost wages for 17 million workers but at the same time, 1.3 million workers would lose their jobs.
U.S. Senate Majority Leader Mitch McConnell said he would not take up the House’s minimum wage bill.
“We don’t need to lose jobs, we don’t have enough jobs now,” he told Fox Business Network in an interview on Thursday. “This would depress the economy at a time of economic boom. We’re not going to be doing that in the Senate.”
Mr. McConnell’s opposition to the bill makes its passage more symbolic in nature. However, it also allows Democratic presidential hopefuls to attract more working class Americans with a promise to tackle growing economic inequality in the country, a key campaign issue for many candidates.
“This is a historic day,” said House Speaker Nancy Pelosi, adding this is about 33 million people in the country getting a raise. “No one can live in dignity with a $7.25 an hour wage. Can you?” she said.
Others such as U.S. House Majority Leader Steny Hoyer said a pay raise for American workers is long overdue. “We’ve now had the longest period without a minimum wage increase,” he said. Several moderate Democrats, especially those who represent districts carried by President Donald Trump and were concerned about job losses, were assured by an amendment that would require a study of the effects of the bill a few years in, leaving room to make adjustments if more jobs are lost than expected. Unions and labour groups, who brought the US$15 minimum wage bill onto the national stage, see the passage of the bill as a key step toward building support among voters in Republican-dominated states and districts.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.