While Lawmakers Struggle to Raise Minimum Wage, Market Forces Are Already Driving Wages Above $15
Market forces brought on by the COVID-19 pandemic have done something that Congress hasn’t been able to do: Push wages above $15 an hour for even the lowest-paid workers.
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That’s well above the federal minimum wage of $7.25 an hour — a number than hasn’t budged since 2009.
Attempts by members of Congress to raise the minimum wage — backed by President Joe Biden as well as labor unions and their allies — have yet to succeed, leaving individual states to establish higher minimums, which most have done. Ten states plus the District of Columbia have aimed even higher, passing laws that will eventually raise their minimum wages to $15 an hour over several years, Bloomberg reported.
But whereas federal legislators have fallen short in raising the minimum wage above $15 an hour, other forces — namely the economy itself — have already succeeded.
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An analysis of jobs posted from spring 2019 to spring 2021 reveals that many service-sector industries rose above $15-an-hour starting wages, according to Bloomberg, which cited data from analytics firm Emsi Burning Glass.
This is largely the result of a labor market that has tightened up considerably in the wake of the pandemic. The number of job vacancies exceeded new hires by 4.3 million in July, which was the highest number in more than 20 years. Meanwhile, workers’ average hourly earnings rose 0.6% in August, which was double what economists expected.
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As Bloomberg noted, the share of workers earning less than $15 an hour in 2021 is dropping by about 1.5% a month, not adjusted for inflation. That’s nearly double the rate of the first seven months of 2019, according to research from Ben Zipperer, an economist at the Economic Policy Institute. Fewer than one-fifth of U.S. workers still earn less than $15 an hour.
A number of high-profile companies have already raised their minimum wages above $15, many in response to current market forces. As previously reported by GOBankingRates, the list of companies that have lifted their minimums above $15 in recent years includes Amazon, Facebook and Target as well as Costco, Aetna, Bank of America, Ben & Jerry’s, Best Buy, Cigna, Charter Communications, Fifth Third Bank, Google, JPMorgan Chase and Santander Bank.
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This article originally appeared on GOBankingRates.com: While Lawmakers Struggle to Raise Minimum Wage, Market Forces Are Already Driving Wages Above $15
