In January, President Joe Biden introduced a plan to increase the federal minimum wage to $15 per hour. With the national minimum wage currently at $7.25 per hour, this plan would more than double the income of Americans earning minimum wage. Biden’s plan includes a gradual transition to the $15 mark with the first jump to $9.50 coming as soon as the bill passes. By 2025 the minimum wage would reach $15 per hour. Workers across America can benefit from an increased minimum wage as long as the appropriate steps are taken.
In Georgia, the federal poverty line for an individual is $12,880 of annual income or $1,073 per month, according to the Georgia Department of Community Health. At minimum wage, working full time, Georgians earn approximately $969 per month after taxes according to the SmartAsset paycheck calculator. This monthly income puts Georgians $104 below the monthly income of the federal poverty line. Even considering a full year, the annual income at the current minimum wage falls below the poverty line.
Also keep in mind that the above numbers represent incomes for an individual. If the household size is more than one, the federal poverty line increases proportionally. To reach the monthly income of the federal poverty line, workers in Georgia would need to receive approximately $8.12 per hour according to SmartAsset. With the proposed $15 minimum wage, monthly income while working full-time would be about $1,894. An additional $925 would go in the pockets of workers, and Georgians would be over $800 above the federal poverty line.
Other states already have minimum wages above $7.25. The U.S. Department of Labor recognizes 29 states as having minimum wages above the federal minimum. Washington, D.C. just increased their minimum wage to $15 per hour last year. The District of Columbia has the highest minimum wage across the U.S., but other states like New York have a minimum wage of $12.50 with certain cities having even higher hourly wages.
The impact of an increase in minimum wage across the U.S. would vary based on state minimum wages and the local economies. Some states could see very little change initially if their minimum wage is already higher than the federal minimum, but other states like Georgia could see large increases in pay.
Biden said that increasing the minimum wage could help the economy in many ways, but according to the Washington Post fact checker, increasing minimum wage to $15 could initially cause a significant loss in jobs due to the major change. The increase in minimum wage to $15 per hour could also cause an increase in the prices of goods and services. Goods, in particular, could cost more to make and develop, which would lead to business owners increasing prices in stores to maintain a profit. However, the increase in minimum wage could also cause the number of people in poverty to be reduced by almost a million by 2025.
A slight increase to $11.50 would show more benefits and less unemployment than $15 per hour, according to the Washington Post. Job losses from an increase to $11.50 would be significantly smaller than the projected 1.4 million that would lose their jobs with a minimum wage of $15 per hour. A smaller increase in minimum wage over time would have a more significant impact to the American people.
A major increase in minimum wage could potentially cause the same things that we saw happen last year on Berry’s campus. Workers will be capable of earning more income; however, employers may cut back on jobs in order to maintain a profit in their business and stay within their budget limits. It creates a drastic shift and no time to adjust to that change.
The increase in federal minimum wage would also impact Berry directly. Last year, Berry increased the minimum wage on campus to $9 per hour so the initial transition to $9.50 would not be a very drastic change for the LifeWorks program. Departments on campus are already adjusting to the $9 minimum so the 50 cent increase would just extend this adjustment period. But over the years, as the minimum wage continues to increase, Berry may face more issues. The exact effects of these problems are not entirely known, but with a proper plan in place to deal with these changes, Berry could handle the transition to $15 per hour more appropriately than the increase to $9.
A change in minimum wage can be a good thing for America, but leaders must enact the change effectively to minimize loss in the economy and workforce. Berry students could see more income and across America, people could rise above the poverty line and reduce the amount of homelessness and unemployment.