WASHINGTON, D.C. — Leaders in Washington are debating whether the federal minimum wage should be more than doubled from $7.25 an hour to $15 an hour.
A House subcommittee took up the issue Wednesday, and lawmakers were at odds over the long-term economic impact to workers and small businesses.
“Washington is caught in partisan gridlock,” said Rep. Dean Phillips (D-Minn.)
There hasn’t been a federal minimum wage increase since 2009.
Phillips pointed out that the current rate comes out to $15,000 a year for a full-time worker.
“That cannot make rent,” Phillips said. “That cannot pay for food.”
Phillips also said lawmakers must continue to discuss the best options so that small businesses don’t get crushed by the proposed change.
Democrats introduced the Raise the Wage Act, backed by President Joe Biden, which would gradually boost the rate to $15 an hour by 2025.
Supporters said it would help close the gender and race pay gaps, and would likely raise wages for 27 million Americans.
“Income inequality would shrink and nearly a million people would be pulled out of poverty,” said Heidi Shierholz, Senior Economist and Director of Policy at the Economic Policy Institute.
Lawmakers heard from a small-business owner of a cosmetic and drug company based in New Hampshire which already starts the pay rate for workers at $15 an hour.
“Our fair pay business model has helped us to attract and retain excellent staff, while supporting the health of our community and keeping us successful into second-generation family ownership,” said Rebecca Hamilton, Co-CEO of W.S. Badger Company.
Opponents of the $15 an hour rate cautioned that the increase could mean more than one million job losses and the closures of small businesses that can’t afford the higher rate.
“I can’t think of anything worse at a time when our small businesses are barely getting back on their feet,” said Rep. Beth Van Duyne (R-Texas).
Opponents argued a one-size-fits-all approach won’t work, and instead said the rate should be determined at the local level.
“What works in D.C. is unlikely to work in D’Iberville, Mississippi,” said Rachel Greszler.
Republicans in Congress have proposed a counter plan calling for an increase in the federal minimum wage to $10 an hour instead.