It wasn’t enacted by Congress, but by the free market.
Employers have over 9 million unfilled job openings. With inflation over 5%, the federal minimum wage of $7.25 an hour (many states have enacted higher) doesn’t cut it. No one can live on that, and no one has to. Employers like Amazon, Target, McDonalds, and Walmart (!) have raised their base wages to $15, and many other companies are following suit.
Barrons magazine’s August 2, 2021, issue discussed the labor shortage in depth. There are several reasons for it:
(1) As of 2019, a majority of baby boomers (i.e., workers over age 65) were still working; those pushed into retirement by the pandemic won’t return to their former jobs.
(2) Neither will the numerous unemployed workers who started their own businesses and became self-employed.
(3) Many parents still can’t get child care, and many of those who can still have reservations about returning their unvaccinated kids to schools. In addition, many families are rethinking work-life issues, and choosing to stay home with their kids.
(4) Immigration, a vital source of labor, has fallen off.
For these reasons and others, Barrons believes, labor shortages will persist well beyond September when schools reopen and pandemic unemployment benefits end, with implications for the economy in terms of inflation, shortages, and wage demands. Faced with a persistent worker shortage, employers simply can’t get away with paying low wages anymore.
The $15 wage is here to stay.