US states to witness a minimum wage increase in 2021

The US will increase the minimum wages of their workers after a decade. As per the reports, 20 states have raised their minimum wage division at the state level in January of this year. Approximately 2% of all non-self-employed workers earned wages below or at the federal minimum wage of $7.25 in the last two years. The workers pointed out that the salaries are insufficient even to make a bare living in the US.

What is the federal minimum wage?

The Fair Labor Standards Act includes the federal minimum wage provisions. The federal minimum wage was $7.25 per hour for non-exempt employees, effective from July 24, 2009. Employees who deserve wages under both federal and state minimum wage laws are entitled to higher wages. The Wage and Hour division of the US department of labors checks and ensures that all workers receive the minimum wage. The law applies to employees of smaller enterprises with at least $500,000, employees of agencies( both state and local government), schools, hospitals, etc.

How is the US going to implement the wage increasing process?

According to the Raise the Wage Act of 2021, the minimum wage will increase to $15 by 2025, a step-by-step process, beginning with a raise to $9.5 in 2021. The act focuses on racial and gender equity, thus bridging all discrimination gaps, ensuring fairer wages for all workers. It will consider the welfare of workers who are adversely affected by the COVID 19 pandemic. Also, the minimum wage will automatically increase every year after 2025. It will eliminate all disparity between the lowest-paid workers and the middle class in due course of time. This time it will be phasing out the subminimum wages as well, and thus, every worker will come under the standard federal scheme.

Different states are going to implement the process differently. While Florida is to choose a gradual increase of the wage until it reaches a benchmark, Michigan has the provision to pause the wage when the nation’s economy is in threat. Some states like Alabama, South Carolina, Mississippi have no minimum wages. Georgia and Wyoming have their current minimum wage below the current federal salary.

Will the policy benefit the economy of the nation?

Minimum wage is a significant policy rule to reduce poverty and improve the standard of living, particularly of the lower-income class. Estimates say that by 2025 about 3.7 million people will come out of the poverty line with this mighty change in wages. The policy will benefit more than 60% of women workers of the country, which is a strategic way to empower them financially.

$15 as minimum wage will benefit the teenagers who are mostly starting with their first job. As per surveys, those workers who have faced their worse during their pandemic had an annual income of less than $50,000, and  every penny of increase will help them meet their ends.

Gopika

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