Backgrounder

Raise the Wage Act

Tags:

116th Congress, 117th Congress, Democrat bill, Minimum wage

*Updated on 2/9/21*

Bill name: Raise the Wage Act
Bill sponsors: H.R. 603, sponsored by Rep. Bobby Scott (D-VA), S. 53, sponsored by Sen. Bernard Sanders (I-VT)

Summary:  The Raise the Wage Act would increase the federal minimum wage to $15 per hour by 2025 through incremental, annual increases.

  • Beyond 2025, the federal minimum wage would automatically increase annually, tied to the percentage increase in the median wages of all workers.
  • The federal tipped wage and youth wage would be phased out through a series of annual increases until their elimination in 2027.
  • The minimum wage for individuals with disabilities would also be phased out through a series of annual increases until that wage is eliminated in 2025.

Background: The last federal minimum wage increase came in 2007. A Democrat-majority Congress approved the Fair Minimum Wage Act of 2007 (H.R. 2) – increasing the minimum wage from $5.15 per hour to $7.25 per hour through three increments over a period of two years. Eighty-two House Republicans and all but three Senate Republicans voted Yes. President Bush signed the wage increase into law as part of a larger emergency supplemental appropriations bill.

In the 116th Congress, the Raise the Wage Act was approved by the House on July 18, 2019 by a vote of 231-199. Previously, it had been marked up on March 6, 2019 by the House Committee on Education and Labor and approved on a party-line vote of 28-20. There was no legislative activity in the Senate.

The nonpartisan Congressional Budget Office in 2021 released a study on the Raise the Wage Act’s effects of increasing the federal minimum wage to $15 in 2025 and found employment would be reduced by 1.4 million workers.

Former Labor Secretary Alexander Acosta told the Wall Street Journal in 2019 that more than doubling the federal minimum wage would result in a loss of jobs in the U.S: “What I think is clear is $15 is something that will undermine this economy and job creation.”

Bill Status: The Raise the Wage Act legislation was reintroduced for the 117th Congress on January 26, 2021. This increase to the federal minimum wage has the support of President Biden.

Click here to download the Raise the Wage Backgrounder. 

Also related:  RAISE Act


ADDITIONAL RESOURCES

REPORT: The Budgetary Effects of the Raise the Wage Act
February 2021, Congressional Budget Office
https://www.cbo.gov/system/files/2021-02/56975-Minimum-Wage.pdf

REPORT: The Effects on Employment and Family Income of Increasing the Federal Minimum Wage
July 2019, Congressional Budget Office
https://www.cbo.gov/system/files/2019-07/CBO-55410-MinimumWage2019.pdf

COALITION LETTER: ATR Releases Coalition Letter Opposed to $15 Minimum Wage
Feb. 2, 2021, Americans for Tax Reform
https://www.atr.org/atr-releases-coalition-letter-opposed-15-federal-minimum-wage

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