Sen. Patty Murray (D-WA) and Rep. Robert Scott (D-VA) are introducing a minimum wage bill on Thursday that would raise the federal floor from its current level of $7.25 an hour to $12 an hour by 2020, eliminate the lower tipped minimum wage that currently stands at $2.13 an hour, and automatically increase it as median wages rise.
Much of that plan is brand new. Previously, Democrats had set their sights on a minimum wage increase to $10.10 an hour, indexed to inflation thereafter, and only raised the tipped minimum wage to 70 percent of the regular minimum wage.
Sen. Murray said she took inspiration from the state she represents in deciding to get rid of the lower tipped wage. “Tipped workers are most exposed to the ups and downs of the economy. The unpredictability of wages makes it even more difficult to make ends meet, on top of trying to scrape by on low wages. So eliminating the tipped wage is long overdue,” she told ThinkProgress in emailed statements. “Washington state has led the way in this, and we’ve seen that it works for restaurants, businesses, and workers.”
Murray also told ThinkProgress that Washington inspired her to target a higher wage level. “There has been great work done in Washington state and across the country to increase wages even further to help the families and businesses in those communities, and I support those efforts,” she said. Washington has long had the highest wage in the country, which is currently $9.47.
A $10.10 wage would have brought it in line with about where it would have been if it had kept up with inflation since its peak in 1968. But this was, according to economist David Cooper with the Economic Policy Institute who has worked with lawmakers on crafting the $12 wage bill, “the lowest possible threshold for where you could be aiming.” He added, “What you’re saying is that low-wage workers should have seen no material improvement in their standard of living over the last 50 years.” That’s despite the fact that there has been significant economic growth, driven in part by rapidly increasing worker productivity.
Even though the Republican-led Congress is unlikely to take such a bill up, Democrats have recently decided they need to take the debate around the minimum wage further. The new benchmark, Cooper said, is to “return the minimum wage to where the distance between the lower paid worker and typical worker is no greater than it was back then.” If lawmakers use a ratio of the minimum wage to the median wage for all workers, which was 52 percent back in 1968, then a $12 wage by 2020 makes a lot of sense, as it would bring the minimum up to 54 percent of the median wage, which today stands at just over $17 an hour. “It’s essentially returning the minimum wage to the same value it had in 1968 in relative terms,” he said.
Real-life experiments beyond Washington state also help give a higher wage level credibility. The majority of states have now raised their minimum wages above $7.25, and evidence shows that critics of a higher wage who worry about job losses may not have a reason to fear an increase. Last year, job growth was actually stronger in states that raised their wages than in those that didn’t, and economics have generally found that minimum wage increases have little impact on job growth. Even fears that Seattle’s increase to $15 an hour were making businesses close were overblown. “Places are pushing minimum wages into territory that we haven’t done before, and the sky hasn’t fallen,” Cooper noted.
Democrats may also have been pushed into a higher wage by low-wage workers who organized and staged repeated strikes demanding a $15 minimum wage in the fast food, retail, home care, and adjunct professor industries. “I think the Fight for 15 [movement] started to recalibrate people’s thinking in terms of what the minimum wage could be,” Cooper said. “From a political standpoint and also from a national awareness standpoint, the Fight for 15 just did a fantastic job highlighting how low pay is in a lot of these industries.”
That kind of national movement has paved the way for lawmakers to reach higher. “I think the Fight for 15 has created space for Democrats, for any politician, to come out in favor of a minimum wage in the $12 range and look reasonable,” he noted. While Congress isn’t looking at a federal $15 minimum wage at this point, some cities and states have taken up the call. Seattle and San Francisco have passed wage hikes to that level, and many other cities and even some states are considering doing the same.