Part of the COVID-19 Relief Bill was the Raise the Wage Act, which is for raising the minimum wage to $15 an hour gradually over the next four years. Though act did not make it into the Relief Bill, it revitalized a very split debate over whether or not a higher wage would help or hurt the American economy.
Some pros of the bill are that it helps the minimum wage workers who need extra income due to COVID-19. Pre-COVID, some state minimum wages were on the rise with California getting up to $11 an hour. With it raising gradually over the four years it wouldn’t immediately hit small businesses as hard.
According to the Congressional Budget Office, 27 million workers would get higher wages and 1.3 million Americans would be lifted above the poverty line. With the potential for inflation there is also the need to adjust the minimum wage to the inflation rate. With a raised minimum wage the pay would match the cost of necessities of housing and food and clothing.
While there are many pros to a raised Federal minimum wage there are also many cons. Smaller businesses that aren’t able to afford paying their employees $15 would have to minimize their staff. Again, to the Congressional Budget Office, this could lead to around 1.3 million unemployed.
It could also lead to inflation, higher wages meaning stores need to up the prices on their products to pay to their workers. Businesses might end up cutting health care access or retirement benefits to make ends meet.
Many states still have COVID restrictions in place. The restrictions on how many patrons can come into the place of business. This is still causing a lot of strain on companies trying to make ends meet.
The bill might have not have made it into the COVID-19 Relief Bill, but it’s very possible similar legislation could make it to the Senate floor again.