In 2012, in what The New York Times called “the biggest wave of job actions in the history of America’s fast-food industry,” workers in New York City walked off their jobs and held a protest demanding a $15 minimum wage. The so-called Fight for $15 was born, and over the next few years workers in cities around the country joined the protests, while the federal minimum wage continued to languish at $7.25 an hour, where it had been since 2009.
It’s still stuck at $7.25, but 30 states and Washington, D.C., have since raised their own minimum wages—from $8.75 in West Virginia to $17.95 in D.C.—and 68 cities and counties have increased their minimums above their states’. There remain plenty of foot-draggers—20 states still abide by the federal minimum of $7.25—but the Fight for $15 continues to win converts: In Pennsylvania on Tuesday, the state House passed a bill to raise the minimum to that very amount.
To some activists, though, a $15 minimum is old news. At a rally last week in Oakland, California, workers and activists aligned with One Fair Wage, a nonprofit group that supports restaurant employees, launched a campaign for a $30 minimum wage in Alameda County, which includes Oakland and Berkeley. Workers have launched similar campaigns around the country, including those for $30 in Hawaii, New York City, and Los Angeles, and $25 in Washington, D.C., and Maryland.
Saru Jayaraman, the president of One Fair Wage, said at the rally that the push for a “Living Wage for All” was the new Fight for $15, and that the campaign was committed to showing that the minimum wage could be raised even further without sacrificing small businesses. “It’s not workers versus small businesses,” she said, then connected her campaign to the fight against inequality overall: “It’s all of us together against the one percent that has been hoarding the profits over the last many decades, many generations, to the point where all of us are struggling to survive.”
These proposed minimum wages, which would be the highest in the country if any of them pass, have inspired dismissive ridicule from some conservative commenters. “It’s just crazy stuff. It’s socialist stuff,” Larry Kudlow said on Fox Business. But some economists too have been arguing since the Fight for $15 launched that some parts of country can’t handle such a hike. Those critiques will grow as Living Wage for All and similar campaigns become more popular. And that’s almost certain to happen because these campaigns are part and parcel of a broader fight, over inequality and the affordability crisis, that only becomes more urgent by the day.
The federal minimum wage was first established during the New Deal, as part of the 1938 Fair Labor Standards Act, which also banned child labor and established the 40-hour workweek. The minimum wage at the time was 25 cents an hour, about $5.75 in today’s money. Even at the time, people warned setting a minimum wage could cost jobs. In response, President Franklin D. Roosevelt said: “Do not let any calamity-howling executive with an income of $1,000 a day … tell you … that a wage of $11 a week is going to have a disastrous effect on all American industry.”
The minimum has been increased several times since then. In real terms, the high-water mark was 1968 at $1.60, which is a little over $15 an hour in today’s money. When the current rate was set in 2009, $7.25 would have had the spending power of $11.22 today, lower in real terms than it was 40 years earlier. Since then, costs of many necessities, like housing, have risen faster than inflation. The Massachusetts Institute of Technology calculates living wages around the country, and the current federal minimum wage doesn’t pay for a basic quality of life anywhere. Even $15 an hour is not enough in many expensive cities. MIT calculates the cost of living in Alameda County at $32.31 for one adult with no children; in the New York City metro area, it’s $31.50.
Indeed, when advocates began fighting for $15 in 2012, they’d planned for the minimum wage to grow with inflation and likely be higher than that now. Vermont Senator Bernie Sanders and Virginia Representative Bobby Scott, who together first introduced a bill to raise the minimum to $15 in 2017, last year introduced legislation calling instead for $17 by 2030. But there’s little chance of that passing unless Democrats win a trifecta in 2028—and even then, it’s hardly a given.
Are these numbers—$17, $25, $30 per hour—too high? Sari Pekkala Kerr, an economist and senior research scientist at Wellesley College who studies the minimum wage, says it’s impossible to know because we haven’t seen the federal minimum wage increase that much at once, even if it’s phased in over several years; they’ve historically been smaller increases. “If a small increase doesn’t have a large employment effect, it doesn’t mean that a large increase might not,” she said. “Prediction gets hard.”
Raising the minimum wage doesn’t necessarily cost jobs, at least not right away. A bigger problem, as Pekkala Kerr sees it, is that employers might reduce worker hours, as a study found happened when Seattle raised the minimum wage from $9.47 to $13 over a three-year period last decade. (It eventually went up to $15 after the study concluded.) So while workers might make more per hour, they won’t necessarily take home bigger paychecks. “They might stay flat,” Pekkala Kerr said. “Or you might have to add yet another job, and then commuting across multiple jobs definitely gets burdensome.” That potential consequence has led some to push for policies, alongside minimum wage hikes, that would guarantee workers more dependable hours and schedules.
But evaluating a single minimum wage hike in isolation, over a limited period of time, ignores the dynamism of the economy, says Kathryn Edwards, an economist who also writes for Bloomberg Opinion. “I think the boogeyman [of job loss] is overblown,” she said of minimum wage hikes. “You don’t see massive layoffs or unemployment when you have a minimum wage increase.” Instead, some of the jobs below the new minimum wage might be eliminated, but they’re replaced with new jobs elsewhere, and overall unemployment doesn’t really rise. “Over a longer period in the U.S., the economy is growing and adding jobs.”
Minimum wage increases are generally popular. They almost always pass when they’re ballot initiatives, and almost every Democratic candidate for president in 2020 promised to raise the federal minimum. Which makes it curious that it’s still a paltry $7.25. Alex Jacquez, the chief of policy and advocacy at Groundwork Collaborative, a progressive think tank in D.C., worked for Sanders when he tried to increase the federal minimum wage during the Biden years, and he said it has a lot to do with who pressures politicians when they’re weighing bills like Sanders’s.
“They don’t get millions and millions of people making substandard wages calling their offices and talking to them,” he said. “They get businesses, and the Chamber of Commerce, and the Restaurant Association getting meetings with them, and kind of playing up, or making the arguments about why they shouldn’t have to pay higher wages,” he said. The failure to increase the minimum wage was a blow, he said. “Not being able to get it done, and with the Democratic trifecta, I think … is why some people maybe are skeptical of some of the commitments that politicians make.”
Nearly all economic policy comes with risk. An ambitious minimum wage hike could cause workers to lose hours or even lose their jobs—but there’s also a cost, not only for workers but the federal government, to leaving the minimum wage at its miserably low level: When families can’t support themselves with a sub-living wage, they turn to the government to get by. In a 2021 hearing on the issue, Sanders pointed to a Government Accountability Office finding that nearly half of workers making less than $15 an hour rely on public assistance, and said taxpayers should not be “forced to subsidize some of the largest and most profitable corporations in America.”
For Edwards, this debate is as much about our national values as it is about economic policy. “The question about the minimum wage is, how little do you think the least person deserves in our economy?” she said. “That’s a very different answer from, ‘Is it possible that there’s a low-wage retail employer that either goes out of business or demands less labor as a result of the minimum wage?’ I would expect that to happen. The question is, does that matter relative to having an economy worth $31 trillion that still has people making $7.25 an hour?”
