The minimum wage for a worker in the United States has remained the same since 2009. However, many businesses and fast food chains have seen tremendous growth in recent years. According to sources, from the beginning of the “Fight For $15” movement until now, many organizations have had millions in revenue each year. Such as McDonald’s, BurgerKing, Wendy’s, to name a few.
On the contrary, the workers in these organizations still face the same minimum wage crisis. This will have a significant impact on the cost of living in the United States.
Stepping into a new era with an increased minimum wage
The ongoing pandemic is a massive setback for minimum wage workers. Like almost all food chains and small chain businesses closed their doors in the last year. This pandemic has had a huge impact on workers as the cost of living increased. Also people could not meet their daily expenses.
As compensation, the US government made sure to make up for the huge losses in the economy. By 2021, nearly 24 states in the United States have increased the minimum wage for workers. Although wages differ from state to state, workers seem to celebrate it on the brighter side, regardless of comparisons. Since 2007, the federal minimum wage for a worker has been $7.25.
After many protests and rallies, the average minimum wage to be estimated is $12 (only states that passed the law to increase the minimum wage) in 2021. With the pace and growth among the industry and their workers, by 2025, a worker’s minimum compensation will increase to $15 per hour. A gradual phase-out to $15 per hour would have a positive impact on workers and also the economy.
Advantages
If the minimum wage is $15 in 2025, 21% of the US workforce will witness a roaring benefit. The average income of a worker is $25,000 annually. If the $15-an-hour scheme comes into play, workers will earn an extra $3,300 annually. In 2020, 59% of families were below the poverty line, according to reports.
But in 2025, only 18% of families in the United States will be below the poverty line. Beginning to reverse decades of growing wage inequality between the underpaid and the median paid workers would start from the $15 scheme, especially between races and genders in the United States.
In 1960, a rise in the wage rate turned the tables with a 20% reversal of wage growth among blacks and whites living in the United States. The cost of living then was considerably low compared to the cost of living now. About $107 billion would be generated by the higher minimum wage for workers in the $15-an-hour scheme.
This will have a positive impact on communities in the United States. The stimulation of the economy will also gradually grow. Also will provide more outstanding business quality and growth of jobs. All these factors together will stimulate the country’s economic development. And help millions cope with the cost of living in the United States.
How the government’s minimum wage helps the economy
With an increase in the state minimum wage, the workers and the country as a whole would be helped. Or at least there won’t be any significant damage to the economy. But there are limitations when it comes to raising the minimum wage without affecting the growth of businesses. The theory behind that scheme is that a consumer will have the upper hand in spending more. And will also automatically contribute to the development of the economy. Therefore, the additional salary will gradually help the workers achieve their goals and help them cross the cost of living.
Some economists believe that the $15 scheme and the minimum wage increase in 2020 will have a negative effect. That on the owners of small chain businesses, as it would be difficult for them to pay for higher minimum workers with the turnover they make per month. Another speculation is also that the growth of job opportunities will slow down. Small-scale owners will make it a point to work with fewer employees, as it will be difficult to afford a higher minimum wage.
The role of the public
According to reports, the public has always shown enthusiastic support for raising the minimum wage. About two-thirds of people living in the United States support the scheme. In 2021, Democratic support (86%) was greater than Republican support (43%). On the contrary, more than half of the Republican community (56%) with an annual income of less than $40,000 have shown their support for the $15 scheme.
Furthermore, more than 94% of the black community has continuously protested to raise the minimum wage. The big thing is that there will be more equality between the races after the scheme has been implemented. There is enormous support across the country. This will be the change that will affect the cost of living to a significant extent.
The low cost of living in the coming years
With significant support from the people around the country, there is sure to be an increase in the federal minimum wage in the coming years. All the protests and pleas will push the government to take significant steps to increase the minimum requirements without affecting the businesses and owners. Soon there will be a significant decrease in the cost of living and increase the morale of the people by meeting their daily needs.
