Biden wants to double the minimum wage
The last time the US minimum wage was increased was in 2009.
But since 2009, the cost of living has risen every year which means that workers that earn the minimum wage of $7.25 today are able to afford less things than minimum wage workers in 2009.
For example, the cost of a pair of Nike AF1 shoes in 2009 was just $80.
Today, the same pair of Nike sneakers costs $110.
To help low-income workers, Joe Biden has suggested the minimum wage should be more than doubled to $15 per hour.
This would raise the incomes of 17 million workers who are currently earning less than $15.
Black and Hispanic workers would benefit most from the minimum wage increase. 35% of Black workers and 40% of all Hispanic (= Spanish-speaking) workers currently earn less than $15 an hour, while only 23% of White workers are living on under $15.
Increasing the minimum wage from $7.25 to $15 will impact some industries more than others.
30,000 workers in the manufacturing industry earn the minimum wage of $7.25. This number is 1.2 million for the leisure and hospitality industry!
In fact, 65.5% of all minimum wage earners in the US are employed in the leisure and hospitality industry.
However, some economists have warned Biden against increasing the minimum wage by such a large amount.
They say that $15 an hour is too high and it could lead to 1.3 million workers becoming unemployed. They suggest raising the minimum wage to $10 an hour would be a more sensible solution.
Questions
- Explain one reason why Joe Biden wants to raise the minimum wage. (3)
- Outline one possible benefit to firms in the leisure and hospitality industry of raising the minimum wage to $15 an hour. (2)
- Calculate the monthly gross income of a worker in the US, employed for 175 hours per month and paid at a minimum wage of $15 an hour. (2)
- Analyse the disadvantages to firms in the US of a minimum wage increase. (6)
- Gross income means income before tax.
- Remember to write two ‘explain’ paragraphs using context!