2019 Minimum Wage Act Would Help Black Workers More Than White

In January, Democrats introduced the 2019 Raise the Wage Act, a bill that would gradually increase the federal minimum wage to $15 per hour by 2024, up from the current federal minimum of $7.25, set in 2009. New research from the nonprofit Economic Policy Institute found that the bill could help black workers more than white.

Following the ambitious agenda set by the working class protest movement "Fight for $15," the Raise the Wage Act would double the federal minimum wage by 2024, index future minimum wage increases to median wage growth and eliminate the carve-out that allows employers to pay less to tipped workers, whose minimum wage is currently set at $2.13 an hour.

The Economic Policy Institute found the increases proposed in the Raise the Wage Act could benefit 39.7 million workers, 11.2 million of whom are parents with a combined 14.4 million children.

The bill would disproportionately boost wages by race, resulting in a pay increase for 38.1 percent of all black workers and 23.3 percent of all white workers. The black working class is more likely to work in jobs that pay less than the proposed $15 minimum, but geography has even bigger impact on workers' pay—black workers are far less likely to work in states with their own minimum wage laws.

"Just as black workers were significantly overrepresented in the industrial sectors originally excluded from minimum wage coverage, black workers today are significantly overrepresented in states that have not raised their minimum wages as the purchasing power of the federal minimum has eroded," Valerie Wilson, director of the EPI's Program on Race, Ethnicity and the Economy, wrote on the EPI site, comparing Raise the Wage Act provisions to a 1967 amendment to the Fair Labor Standards Act that researchers found narrowed the black-white earnings gap by 20 percent by 1980. "In both instances, these were intentional policy decisions rooted–at least in part–in indifference if not outright hostility toward black workers," Wilson added.

Introduced in the House by Bobby Scott of Virginia, the Raise the Wage Act has nearly 200 co-sponsors, including Speaker of the House Nancy Pelosi, potential 2020 presidential candidates like Beto O'Rourke and Tulsi Gabbard, plus newly elected members of the House, including Representatives Rashida Tlaib and Alexandria Ocasio-Cortez.

The Senate version of Raise the Wage Act, sponsored by Bernie Sanders, has 30 co-sponsors, including potential and announced 2020 candidates, including Sherrod Brown, Cory Booker, Tammy Baldwin, Kirsten Gillibrand, Amy Klobuchar and Elizabeth Warren.

There are no Republican co-sponsors, though a 2019 Hill-HarrisX poll found that 70 percent of Republican voters were in favor of a higher federal minimum wage.

Co-sponsor and newly elected Democratic Representative Ilhan Omar of Minnesota's 5th District made a specific example of McDonald's, calling out the fast-food giant for its immense CEO-to-worker pay gap (3,101 to one) and poverty wages.

"Just 10 percent of McDonald's workers in the U.S. make a living wage," Omar tweeted Tuesday. "Millions of workers in the U.S. are struggling just to put food on the table, while McDonald's CEO makes $21.8 million a year. That's just wrong. We need to #RaisetheWage so that no one in the richest country on Earth lives in poverty."

Without reform, the American minimum wage will continue to lose value to inflation. Liberal think tank the Center for American Progress (CAP) estimates full-time minimum wage workers have lost nearly a full year of wages—$13,329 dollars in real-world value, compared to minimum wage yearly earnings of $15,080—over their past decade of work, as inflation erodes the value of the federal minimum.

Rachel West, CAP's director of poverty research, found that minimum wage workers would need to work an additional 44 days a year to make up the 10-year loss in value.

Business groups like the U.S. Chamber of Commerce and the National Restaurant Association have argued that a $15 minimum wage will hurt small businesses, though recent minimum wage studies in Seattle and Pasadena haven't found such claimed effects. In 2018, the U.S. Census Bureau released data indicating a higher minimum wage could increase earnings without a corresponding decline in employment and could even have slowed down soaring income inequality in the wake of the 2008 recession.