When candidate Joe Biden proposed raising the federal minimum wage from $7.25 an hour to $15, it seemed like pie in the sky. When labor unions demanded the same, the big employers ignored them.
But then came the pandemic, and everything changed. As the economy reopened, employers encountered unexpected labor shortages. They raised wages, they offered signing bonuses, and without Congressional action, the de facto minimum wage, writes Michael Sasso in BloombergBusinessWeek:
The push for a $15 federal minimum wage may have stalled in Congress, but Covid-19 is helping steer the U.S. ever closer toward a key objective of labor unions and their allies in the White House and on Capitol Hill.
An analysis of jobs posted from spring 2019 to spring 2021 from a sampling of cities shows many service-sector industries crossed above a $15 starting wage during the period, often by significant margins, according to Emsi Burning Glass, an analytics firm that tracks job postings to glean labor market insights. The trend seems to have gathered steam in the recovery from the Covid recession, with several large employers, including Walmart, Target, Best Buy, and Chipotle Mexican Grill, bumping up starting or average hourly pay to $15 or more. Amazon.com Inc. recently announced it was boosting average starting wages for open logistics jobs to $18 an hour.
Ten states, plus D.C., have passed laws that will incrementally raise their minimum wage to $15 over several years. Campaigning for the presidency, Joe Biden proposedraising the federal minimum wage, currently set at $7.25 per hour, to $15, but his administration would be hard-pressed to marshal enough votes in Congress—even among Democrats—to make that a reality.
That some companies are targeting $15 specifically suggests they’re signaling that they’re treating employees more fairly, which still represents something of a victory for the union-backed “Fight for $15” campaign, says Ben Zipperer, an economist at the left-leaning Economic Policy Institute (EPI). In Los Altos, Calif., Smith.ai, a 330-person business that handles customer support for companies, recently raised its starting wage to $15 an hour, purposely choosing that rate in part because of all the attention on the issue. “I think people are looking at $15 as the new normal, kind of the new standard,” says co-founder Aaron Lee. “As we bump up to $15, we see a lot more applicants.”
The tight labor market has empowered workers to demand higher pay and improved conditions. The number of job vacancies exceeded new hires by 4.3 million in July, the most in data going back to 2000. Meanwhile, workers’ average hourly earnings climbed 0.6% in August, twice as much as forecast.
The article includes a graph showing that, before the pandemic, about 1/3 of workers earned less than $15 an hour. Now that proportion is down to 20% and may continue to drop.
Diane Ravitch's blog 
For far too long, we have had in this country two parties representing the wealthy. And so neither educates workers to vote in their own interests. We might have to wait until the old guard dies out for anything to change. It’s sickening that even this small thing–the $15.00 minimum–couldn’t get passed. Too many politicians who don’t represent (actual meaning) the people whom they represent (nominal meaning).
I think you are correct….the old guard needs to die out! I do think that $15 should not be the set amount. It is much cheaper/expensive to live in certain areas of the country so I think that wage needs to be relative to the state. I really don’t think that $15 min wage could support anyone living in NYC, but in a place like Alabama (?) that may be possible?
Exactly, Lisa. Only some idiot politician interested almost exclusively on the press would come up with the across-the-board $15 proposal. It would be easy enough to peg this stuff to the cost of living.
https://www.cnbc.com/2021/02/21/15-minimum-wage-wont-cover-living-costs-for-many-americans.html
Lisa: With regard to the possibility of making it in Alabama for less: If their real estate is appreciating i value the way ours is in the Tennessee borderland, they are no more capable of buying a place to live than an urban resident in other parts of the country. The cost of housing and the cost of health care have universally driven up the cost of living all over. The American Great Plains does offer less expensive housing in places, but rarely near employment opportunities. Those who can work from a distance generally find it possible to live where life is more stimulating than some of the remote areas of the country where real estate lowers the cost of housing. Timing is another factor. Those who got into the housing market earlier found the dramatic appreciation of their assets. The later in time, the harder to recoup the huge investment in housing.
Why would anyone say that $15 dollars minimum wage shouldn’t be the “set amount”? Do you mean that the federal minimum wage should be higher than $15/hour? Or are you arguing against having any federal minimum wage at all and allowing right wing states to decide to pay their workers less?
Cities or states can always make a minimum wage that is higher than the federal minimum. The federal government has set a minimum wage since before I started working some 40 years ago.
Historically, as labor markets tighten, wages and working conditions improve. When the market loosens, look for wages to decline and working conditions to deteriorate. It’s the American way.
If we were serious about bringing minimum wage up to where it should be given inflation and worker productivity over the last 5 decades, we wouldn’t settle for anything less than 25.00 an hour…in the midwest.
If a worker is putting in 30-40 hours a week, they should be guaranteed a livable wage with the means to eat out on occasion and take the family on vacation a few times a year. Nothing less. If an employer can’t guarantee that, they are not in a position to hire workers and should be considered a failure.
But, then again, why should one’s ability to produce additional wealth for an already insanely wealthy person determine whether or not basic human needs are met?
Worker productivity has increased by over 80 percent since the mid 1970s, while wages have been almost flat. All that increased value went into the pockets of the ownership class.
Lots of folks here have seen this graph: https://www.epi.org/productivity-pay-gap/
It compares overall productivity growth with compensation earned by a subset of workers in the economy: private nonsupervisory workers. Before 1980 this group of workers included about 22% manufacturing employees, but now it is down to below 9%. A much higher percentage of private nonsupervisory workers are service workers now, a sector of employment where there is not much productivity growth.
How do you measure productivity in a service job? Does a housekeeper have to clean more rooms more quickly? Does a dishwasher have to wash more dishes? How about a janitor washing more floors? I remember a custodian at one of my schools getting docked for not keeping the floors dry by all the entrances on winter days when everyone was tracking in snow. I slid on a wet patch and hit the deck. I found out later that the custodian got written up. Ridiculous! He had six entrances around the perimeter of the building to simultaneously keep dry.
Speduktr,
Yes, all the things you describe would be how productivity is measured in service jobs.
Hence the plan to have experienced teachers teach the same content to 100 students at a time that they used to teach to 25?
So in order to “earn” a raise, a custodian, housekeeper, dishwasher must be able to continuously up production whether realistic or not. Stupid.
Folks interested in a detailed look at the impact of local minimum wage increases might be interested in the University of Washington study of Seattle. Their webpage is here: https://evans.uw.edu/faculty-research/research-projects-and-initiatives/the-minimum-wage-study/