The federal minimum wage hasn’t been raised since 2009, and wages for most American workers have been largely stagnant for decades. There’s been a significant upwards redistribution of income from most workers to the wealthiest people in society, which was caused by deliberate policy.
If the minimum wage had kept pace with productivity growth (gains in worker output and technological advancement) since the early 1970s, it actually would be at about $20 an hour today. The Sanders legislation on raising the minimum wage (which would not necessarily increase unemployment, as seen by some of the highest minimum wage states having some of the lowest unemployment) would thus provide a substantial standard of living increase for many.
By increasing the federal minimum wage over the next five years, the Raise the Wage Act of 2019 would boost the incomes and improve the lives of an estimated 40 million Americans, according to an analysis out Tuesday from the Economic Policy Institute (EPI).
Introduced last month by Sen. Bernie Sanders (I-Vt.) and Rep. Bobby Scott (D-Va.), the bill would raise the federal hourly minimum wage from $7.25—which Sanders calls “a starvation wage”—to a living wage of $15 by 2024. It would also require employees to pay the new minimum to tipped workers, who currently can make as little as $2.31 an hour.
In addition to helping millions of Americans escape poverty, the bill would also benefit the economy more broadly. “Because lower-paid workers spend much of their extra earnings,” the report outlines, “this injection of wages would help stimulate the economy and spur greater business activity and job growth.”