The European Union is discussing increasing the minimum wage, what does the project mean?

The European Union is discussing increasing the minimum wage, what does the project mean?

When did the United States set a minimum wage?

First enacted by Congress in 1938 as part of the Fair Labor Standards Act, the minimum wage was revised several times, most recently in 2007, when Congress voted to gradually raise it from $ 5.15 to $ 7.25 an hour.

Since then, many state and local governments have raised the minimum wage to 15 per hour or other levels, higher and lower.

Of the 50 states, 21 states currently meet the federal level of 7.25, while the rest have an upper minimum.

Currently, 25 states prohibit cities and counties under their jurisdiction from setting a local wage higher than the state level, according to Resourceful Compliance, which tracks labor law.

How will the proposed increase work?

According to the bill introduced by Democrats in the House and Senate, the minimum wage would rise to 9.50 an hour three months after the law was enacted, after which it would reach 15 in four periods over five years. ..

The proposal also increases the base salary of waiters and other dependent employees on classified information, and directs the US Secretary of Labor to calculate the average hourly wage for all employees annually.

In years when the average is rising, the federal minimum wage will rise by the same percentage.

Will it hurt the economy?

Economists have long debated whether the decision to boost workers’ purchasing power outweigh the additional wage burden on firms. There is no consensus on this.

“There has been a debate for years,” says Gregory Daco, chief economist at Oxford Economics in the US, explaining that some studies have shown that it can cause job losses, while others do not.

Even the same study can be interpreted differently.

Critics of the Higher Pay Initiative point to a 2019 Congressional Budget Office report that said raising the level to $ 15 an hour would result in 1.3 million workers losing their jobs.

But proponents of this measure indicated that the same report indicates that the proposal will lift 1.3 million people out of poverty and raise the wages of up to 27 million additional workers, which they argue leads to these benefits that compensate for lost jobs.

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