Federal Minimum Wage: Potential $15 Hike and Economic Impact

With a new presidential administration comes big changes, and the Biden White House seems determined to make its mark right away. Though we're only a few days out from the inauguration, President Joe Biden has already issued a number of executive orders on major policy issues. One of them could affect the very heart of our economic system, with the chance to make life very different for millions.

The federal minimum wage has stayed stuck at $7.25 for more than a decade; it's deeply inadequate for its purpose, which is to provide workers with enough income to support independent living at 40 hours of work per week. Inflation and cost of living expenses have far outpaced the minimum wage for decades. Biden, following the lead of groups like Fight for 15, has directed the federal government to make recommendations for raising the minimum wage for government contract workers to $15 an hour.

This sounds kind of obscure, but it is a clear step toward nearly doubling the minimum wage nationally. The U.S. Department of Transportation estimates that an hour of your time generally starts with a $14 value; in the nine most expensive U.S. cities, it's $19. If the minimum wage had followed Wall Street bonuses, it would be more than $33.50.

For those worried about how such a hike would affect business owners, cities and states have proven yet again that they're the laboratories of democracy. Raising wages by just one dollar has shown to have huge increases in worker wellness, productivity, and satisfaction.