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The Race Towards $15 An Hour Could Be In The Near Future

In 1938, President Franklin D. Roosevelt signed the Nation’s first minimum wage law, which set the wage at $0.25 an hour. In 2009, the minimum wage was last raised to $7.25 per hour. Fight for $15.00 protesters have gathered to speak out against what they consider unfair wages. In their latest action on April 14th, over 300 cities and 10 countries held actions to advocate for a living wage. Among the protesters were fast food workers, home care workers, childcare workers, and adjunct professors.

Many workers who rely on the federal minimum wage and work full time, must rely heavily on government assistance to make ends meet. The Economic Policy Institute found that raising wages for low-wage workers would unambiguously reduce the net spending on public assistance, particularly among workers who are affected by the federal minimum-wage increase. The study found that for every $1.00 increase in hourly wage, it reduces the means-tested of public assistance by 3.1 percentage points. This would mean that the number of workers receiving public assistance could be reduced by 1 million people with a wage increase of $1.17 per hour. Further, raising the federal minimum wage to $12.00 per hour by 2021, would reduce the means-tested public assistance by $17 billion annually.

A minimum wage of $15.00 per hour has become more of a reality in a handful of states and cities that are taking steps to phase in the pay floor over the next few years. Over one dozen of legislative or ballot proposals are expected to move towards an increase of minimum wage. Currently 14 cities, counties, and states including; New York, Massachusetts, The District of Columbia, and California have approved a $15 minimum wage through local laws, executive orders, and other means to take effect in the upcoming years. Birmingham, Alabama has become the first city in the deep South to enact a minimum wage above the federal level. The ordinance in Birmingham plans an increase to $8.50 per hour by July 2016, with a second increase to $10.10 to begin July 2017.

A case study was conducted in San Francisco and Santa Fe, the two cities with the longest track record of a higher minimum wage, and it revealed, “no statistical significant negative effect on employment or hours.”  This study discovered that businesses are not found to have the need to relocate, in response to a local minimum wage increase. Restaurants and other retailers have found different ways to absorb higher wage costs than by laying off workers. Evidence suggests that Companies become more efficient and that higher labor costs can incentivize employees to eliminate waste and raise performance standards, while at the same time enhance the motivation of workers. This study has shown that Companies have ended up with less turnover and shorter vacancy periods when filling jobs.

At least 23 notable Employers have voluntarily increased their minimum pay to $15.00 per hour or higher, either through company policy or collective bargaining agreements. These companies include: Aetna, Nationwide, Facebook, University of California, Duquesne University, and Ben & Jerry’s. At Costco, the starting pay is currently at $11.50 per hour, and the average employee there earns $21.00 per hour. Other Companies such as Whole Foods, have found that their turnover rate is less than 10 percent.

The fight for $15.00 has brought attention to issues regarding a fair living wage, and it is currently a topic of discussion in this years elections. While raising the federal minimum wage to $15.00 per hour may not happen in 2016, states and localities are moving in the right direction and beginning to show an increase in wages. This can only be properly analyzed in the future years, as to its success towards a better economy and less public assistance.

By: Daniela Carrion