$15 minimum wage hike: Will it make the stimulus bill, what’s happening now – CNET


Will Americans get a pay raise? 

Sarah Tew/CNET

A struggle over a national minimum wage is turning up the heat on President Joe Biden’s campaign pledge to raise the federal minimum wage from $7.25 an hour to $15 an hour. Initially bullish on adding the $15 minimum wage hike into his $1.9 trillion COVID-19 stimulus plan, Biden is now doubtful it will make it into this round of legislation. But he, and other backers, are expected to include the proposal in a bill of some sort even if it isn’t part of the stimulus package currently being written.

By including minimum wage in Biden’s American Rescue Plan — which would also approve a third stimulus check, more weeks of unemployment benefits and money for COVID-19 vaccine distribution — Biden could begin a years-long transition to increase America’s minimum wage, starting with certain groups of people. 

As poll after poll shows a majority of Americans support the higher wage, there is still opposition to the increase in Congress, which will make the fight for $15 a long battle. We’re going to answer the questions you have about who the minimum wage would apply to, how the timeline would work, what happens if it isn’t in the next stimulus package and where the situation stands today. 

What is President Biden’s plan to raise the minimum wage?

Biden’s plan calls for an increase to the federal minimum wage, and to end the ‘tipped minimum wage‘ (for people whose income is based largely on tips, like restaurant servers) and sub-minimum wage for people with disabilities. Workers who receive at least $30 in tips a month qualify for the “tipped wage,” which is split between a $2.13 minimum cash wage and a $5.13 maximum tip credit with both combining to $7.25. 

According to the Fair Labor Standards Act, certain groups qualify for a wage below the minimum, which is currently $4.25. This includes student workers, those under the age of 20 and workers with a physical or intellectual disability. 

“There should be a national minimum wage of $15 an hour,” Biden said on Jan. 14 when he presented his economic plan. “Nobody working 40 hours a week should be living below the poverty line.”

While legislation is required to raise the national minimum wage, President Biden can increase the wage for federal workers via executive order. On Jan. 22, he signed an order to have the Office of Personnel Management provide recommendations for a $15 an hour wage for federal workers, as a starting point.


A minimum wage raise would happen gradually over the course of years.

Sarah Tew/CNET

What is the current minimum wage? Is it the same in every state?

The federal minimum wage for $7.25 an hour was decided in 2009. States and cities, however, can dictate their own hourly minimum, based on local economics, for example. Washington has the highest among the states at $13.69, and Seattle is the major city with the top minimum wage of $16.69 for most workers, beginning Jan. 1, 2021. 

What happens if the minimum wage goes up? 

As the case with previous increases, wages would jump in annual increments. The Raise the Wage Act would take five years before workers would receive $15 an hour. Here’s a breakdown of how the bill would affect the minimum wage, the tipped wage, the youth wage for workers under the age of 20 and the 14(c) subminimum wage for workers with disabilities.

Minimum wage raise proposal by year (Raise the Wage Act)

Minimum wage Tipped wage Youth wage 14(c) wage
Current $7.25 $2.13 $4.25 $4.25
2021 $9.50 $4.95 $6.00 $5.00
2022 $11.00 $6.95 $7.75 $7.50
2023 $12.50 $8.95 $9.50 $10.00
2024 $14.00 $10.95 $11.25 $12.50
2025 $15.00 $12.95 $13.00 $15.00
2026 $15.00 $14.95 $14.75 $15.00
2027 $15.00 $15.00 $15.00 $15.00

What’s the latest development on raising the minimum wage for everyone? 

Biden and other backers of the $15 national minimum wage will likely need to address it in a bill or package that’s separate from  Biden’s $1.9 billion American Rescue Plan. The Senate voted 99-1 on an amendment to not raise the wage during the pandemic, which had the support of Sen. Bernie Sanders, a Democrats from Vermont and the Senate Budget Committee Chairman.

“I will support this amendment because nobody is talking about doubling the federal minimum wage during the pandemic,” Sen. Sanders said Friday. “We’re talking about gradually phasing it in over a five-year period.”

Although the pay increase wasn’t included in the package, the vote to prevent wages from going up during the pandemic was nonbinding, which means it could be added at a later date. 

What happens next?

There are currently two courses of action to increase the federal minimum wage. As previously mentioned, the economic relief package passed by the Senate last Friday is currently in the House of Representatives. Over the course of two weeks, committees will work on legislation that will be voted on, and if approved, sent back to the Senate for a vote and then to President Biden for his signature. 

According to the Progressive Caucus Twitter account, the $15 minimum wage increase was included in the House pandemic reconciliation package. This means it could be added to the final legislation that eventually makes its way to the Senate. 

The second course of action is a standalone bill to raise the minimum wage. Before both chambers of Congress approved the budget reconciliation for Biden’s package, House and Senate Democrats introduced the Raise the Wage Act of 2021, which would begin annual increases until 2025. 

It’s unclear whether President Biden and Democrats will choose to push for the wage hike through budget reconciliation, through the standalone bill or try to add it to another economic stimulus bill in the future. 

What are the roadblocks to raising the minimum wage? 

Opponents of the minimum wage in both the House and Senate cite several issues with raising the wage to $15 an hour. The most common reasons cited are the potential for job losses, putting a strain on small businesses and an increase in the price of goods. 

Raising the hourly wage to $15 would result in an average of 1.4 million jobs lost over the course of four years, according to a report from the Congressional Budget Office released on Monday analyzing the Raise the Wage Act of 2021. The increase would also bring 900,000 people out of poverty. 

There are other studies that show in cities where the minimum wage was increased to more than $10 an hour there was either a small loss of jobs or an increase. 

For more information about bills in Washington aimed at bringing households more money, here’s how a proposal to expand the Child Tax Credit could send families a check every month for a year, and the latest stimulus check timeline, payment limits and qualifications.