It seems that the country is closer than ever to a bump in the federal minimum wage.
But as the possibility of raising the country’s lowest pay to $15 an hour increases under the new administration, the fate of the bill is uncertain and debate around increasing the minimum wage rages on among lawmakers.
Read on below to learn about the status of a possible $15 minimum wage and what the effects could be on workers, businesses and the economy as a whole.
What could happen if the minimum wage goes up?
Increasing the federal minimum wage to $15 could both bring people out of poverty, as well as cost jobs, according to the Congressional Budget Office.
A February report from the CBO, a nonpartisan agency that provides lawmakers in Washington with budgetary analysis, estimated that over the next four years, increasing the nation’s lowest pay to $15 an hour would cost 1.4 million jobs while bringing 900,000 Americans out of poverty.
The report projects that the loss in jobs through 2025 would be a result of businesses mitigating for the increased costs of payroll.
The CBO report also said the increase to $15 of the minimum wage would increase the federal deficit by $54 billion over the next decade (for context, the 2020 deficit was upwards of $3 trillion).
How would a $15 minimum wage affect Social Security?
A report from Social Security Works, a group that advocates for the expansion of Social Security benefits, estimates that a $15 minimum would boost these benefits annually by about $5,000, CNBC reports.
According to SSW, a worker who has earned minimum age their entire life and retires in 2021at full retirement age would receive monthly checks of $970.80. However, if the minimum wage was $15 per hour, this worker would receive $1,409.60 per month — an annual increase of $5,157.60, per the report.
The increase would help workers over 55, who account for about 1 in 6 of workers who make that rate. It would also help 59% of female workers, 31% of African American workers, and 26% of Latino wo