- The minimum wage in the US has been $7.25 for the last 13 years.
- A new study finds that raising the minimum wage to $15 would lift 7.6 million people out of poverty.
The minimum wage has been $7.25 for 13 years in the US, with Congress failing to raise it since President Joe Biden's tenure as vice president. A new study finds that delivering the $15 minimum wage that Biden has tried — and failed — to get through Congress would lift millions of Americans out of poverty.
In a paper from the Urban Institute and funded by the Robert Wood Johnson Foundation, authors Gregory Acs, Linda Giannarelli, Kevin Werner, and Ofronama Biu look at what might happen if a $15 minimum wage was enacted.
In a case where no one loses a job due to the increase — which research finds is a likely scenario — nearly 7.6 million people would be lifted out of poverty, the study finds. And, even in a scenario where some workers earning under $15 an hour do lose their jobs, nearly 7 million would still be lifted out of poverty.
In the case that no workers lose their jobs, annual earnings in families that have at least one worker affected by a minimum wage increase would go up by around $5,600. The raise would also save you money: A 2021 study from the UC Berkeley Labor Center found that low wages cost taxpayers $100 billion annually, because people earning those wages have to depend on social programs like SNAP and Medicaid.
Hispanic workers and women would disproportionately benefit from a $15 hike. In the case of no job loss with an increase in the minimum wage, 2.8 million Hispanic people could be lifted out of poverty according to the paper.
"On average, workers from all racial and ethnic backgrounds are projected to see earnings and net resource gains and reduced poverty, and Hispanic workers and their families are projected to see the greatest gains," the authors wrote.
The authors also find that there might be "spillover effects," where workers who already make close to $15 an hour will see their wages bumped as pay rises across the board.
That's already a documented effect when big brands with high pay come to town. For instance, economists from University of California, Berkeley and Brandeis University found that when a company like Amazon arrives in a city with its minimum $15 wage, nearby wages go up too. There was a 4.7% increase in average hourly wages for local employers when Amazon raised wages by nearly 20%.
While wages in the US have skyrocketed over the past year — driven in part by workers quitting for more money and better deals — those gains are being eaten up by inflation. And for workers in the 20 states that still default to the federal rate, that wage is at its lowest value in decades after adjusting for rising prices.
"It is very frustrating to me that Congress and many state legislatures — but not all — have effectively abandoned their commitment to paying decent wages," Ben Zipperer, an economist specializing in the minimum wage and low-wage labor markets at the left-leaning Economic Policy Institute, previously told Insider.