Sunday 31 January 2021

How much would a $15 minimum wage really be worth?

(KXAN) — Millions of American workers haven't seen their $7.25 minimum wage increase in over 10 years, but a push by the Biden administration and Washington Democrats might give these workers a double raise.

As part of President Joe Biden's $1.9 trillion COVID-19 relief package, the federal minimum wage would increase to $15 by 2025. Many in Congress and elsewhere say that's just too much.

Well, depending on where you live, it might not be enough.

A new map created by Business Insider shows how much the increase would actually be for minimum wage workers in each state. While the Economic Policy Institute reports about 32 million Americans would receive a raise overall, how many workers in each state might actually be getting less because of where they live?

Using information from the Bureau of Economic Analysis, the map figures how much $15 would translate to given the state's "regional price parity," or how expensive goods and services are compared to other states.

In Hawaii, the state with a 119.3 RPP -- 19% higher than the national average -- a $15 minimum wage would be the same as making $12.57 per hour. Meanwhile, a $15 minimum wage in Mississippi would actually feel like making $17.77 an hour -- the highest on the map.

The $15 minimum wage in Texas would feel about $15, ranking in at $15.54 per hour, although that estimate is lower than most other southern states, except for Florida, where $15 per hour would feel more like $14.85.

There are countless arguments for and against raising the minimum wage, but Felix Koenig, assistant professor of economics at Carnegie Mellon University, told Business Insider that cost of living should be in the equation during minimum wage talks.

And because cost of living is constantly in flux, Koenig explained: "How much workers will benefit from $15 thus depends on how soon this policy is introduced, how much prices rise in the meantime, and how often it gets uprated in subsequent years."



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