March 9, 2021 – A new EPI report finds that the Raise the Wage Act of 2021, which phases in a $15 minimum wage by 2025, would raise the earnings of 32 million workers—21% of the workforce. The report also shows how many workers would benefit in each state and congressional district, revealing that 24 million workers—75% of those who would have received a raise—are in states represented by the 58 senators who voted against including a $15 minimum wage in the American Rescue Plan last week.
The report—authored by EPI economist Ben Zipperer, data analyst Zane Mokhiber, and senior economic analyst and deputy director of the Economic Analysis and Research Network David Cooper—shows that the minimum wage today would be over $22 per hour had it tracked productivity increases over the last five decades.
“Congress hasn’t raised the minimum wage in over a decade, and their inaction has effectively given minimum wage workers a pay cut. A full-time federal minimum wage worker today earns 18% less than what their counterpart earned at the time of the last increase, and 32% less than they earned five decades ago after adjusting for rising costs of living,” said Zipperer. “A $15 minimum wage would help eliminate poverty-level wages and deliver broad benefits to workers and the economy. The Senate must take up and pass the Raise the Wage Act as soon as possible.”
Additional key findings show that a $15 minimum wage by 2025 would:
- Raise the wages of at least 19 million essential and front-line workers—60% of all workers who would see a pay increase.
- Increase pay for nearly one in three Black workers (31%) and for one in four Hispanic workers (26%), compared with about one in five white workers.
- Lift out of poverty up to 3.7 million people—including an estimated 1.3 million children.
- Result in an annual pay increase of about $3,300 for affected workers working year-round. In total, a rising wage floor would provide over $108 billion in additional wages to affected workers.
While there is a common misperception that the workers who would benefit from a higher minimum wage are mostly teenagers in their first jobs, the authors show that about 90% of those with increased wages would be adults ages 20 or older. Further, most of the workers who would benefit are women (59%) even though men are a majority of the workforce.
“A $15 minimum wage would raise the pay of essential and front-line workers, reduce the number of people living in poverty, narrow racial pay gaps, and boost the economy,” said Cooper. “Raising the minimum wage is a no-brainer—and long overdue.”