Although raising the federal minimum wage to $15 per hour has gained steam recently, using this method to reduce income inequality will end up costing jobs. Although large corporations can afford this increase, small businesses cannot, especially after the COVID-19 pandemic’s devastating effects on our economy. Additionally, it is absolutely absurd that the federal minimum wage has not increased since 2009. I propose a different method to achieve greater income equality:
The Fair Labor Standards Act must be amended to broaden the requirements needed for an employer to pay minimum wage, and businesses with 50 employees or less must be allowed financial incentives to encourage expansion or increased hiring. Businesses that reduce employee benefits for any reason would lose eligibility for these incentives.
The federal minimum wage must see a cost of living adjustment (COLA) every year using the same type of calculation used for Social Security in order to keep pace with inflation. Small percentage increases every year allow owners of small business time to increase employee pay until it can reach $15 per hour.
The economic havoc that COVID-19 has unleashed on our economy has shed light on the devastating income inequality in America. The bottom line is that ALL Americans deserve a living wage, and I will fight for it relentlessly in Congress. The American Dream is NOT living paycheck-to-paycheck, and it is long past time for Congress to level the playing field and allow everyone to pursue it.
**Example, an individual making minimum wage of $7.25 in 2020 would receive a 12% increase in base pay ($.87/hr.) plus 2% COLA ($0.15/hr.) to increase the hourly base pay for 2021 to $8.27/hr. Then wage earners and employers alike can see what this would mean for them personally. End the percentage increase (keep the COLA) when the federal minimum wage reaches $15.00/hour or other predetermined level.