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Law & the Courts

House Passes $15 Minimum Wage Bill

People celebrate the passage of the minimum wage for fast-food workers during a rally in New York City in 2015. (Brendan McDermid/Reuters)

The Democratically-controlled House passed legislation Thursday to increase the federal minimum wage to $15 per hour.

The Raise the Wage Act, which passed 231-199 with the support of three Republicans, would hike the minimum wage to $15 per hour by 2025 and would index the minimum wage to inflation after that. It would also phase out the minimum wage exception afforded to businesses that employ workers who receive tips.

“I commend my colleagues for taking this important step towards creating an economy that works for everyone,” Representative Bobby Scott (D., Va.) who introduced the legislation, said in a statement. “Now, Senate Republicans must decide to either stand with American workers or turn their backs on hardworking people across the country.”

Democratic leadership promised to pass the bill as one of their first acts once they won the majority, but the effort met with resistance from moderate Democrats who were concerned about the bill’s economic impact on their rural districts. The moderates’ opposition to what was a signature campaign promise of many newly elected progressive lawmakers widened an existing rift within the caucus.

If the legislation takes effect — an unlikely outcome considering majority Leader Mitch McConnell’s refusal to take it up in the Senate — it would result in the elimination of some 1.3 million jobs, according to a report released by the non-partisan Congressional Budget Office earlier this month.

“About 1.3 million workers who would otherwise be employed would be jobless in an average week in 2025,” the report reads. “That decrease would account for 0.8 percent of all workers and 7 percent of directly affected workers who would otherwise earn less than $15 per hour.”

The report also predicted that roughly 17 million workers would see their wages increase under the legislation — but real total income would decrease by $9 billion, with most of the losses accruing to business owners and consumers who would see prices increase.

 

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