Democrats' coronavirus relief plan would raise minimum wage to $9.50 this year

Kathryn Krawczyk
·2 min read

House Democrats are working on details of their graduated plan to raise the U.S. federal minimum wage to $15/hour.

Democrats are looking to include the first hike to the federal minimum wage since 2009 in President Biden's coronavirus relief bill. They plan to revise the proposal Tuesday, but it so far includes a quick increase from the current minimum wage of $7.25 to $9.50 within the year. It will then grow annually until hitting $15 in 2025. Meanwhile the tipped minimum wage of $2.50 will rise to $4.95 this year, and again increase until it matches the federal wage. The youth subminimum wage paid to people under 20 will also end up matching the regular minimum wage by 2027, and permits to pay subminimum wage will no longer be distributed.

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A report from the nonpartisan Congressional Budget Office released Monday found that raising the minimum wage to $15/hour by 2024 would increase paychecks for 17 million Americans, or 10 percent of the workforce. It would also lift 900,000 people out of poverty, but cost 1.4 million jobs, particularly for "younger, less educated people." Sen. Bernie Sanders (I-Vt.), a top proponent of the $15 minimum wage, quickly disputed some of the report's findings.

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