Sen. Mitt Romney (R-UT) and Sen. Tom Cotton (R-AR) unveiled a proposal on increasing the federal minimum wage to $10 by 2025. The proposal comes as President Joe Biden and Democrats push to include a provision increasing the minimum wage to $15 by 2025.
“For millions of Americans, the rising cost of living has made it harder to make ends meet, but the federal minimum wage has not been increased in more than ten years,” Romney said in a statement on Tuesday. “Our legislation would raise the floor for workers without costing jobs and increase the federal minimum wage to $10, automatically raising it every two years to match the rate of inflation."
Under the proposal, the minimum wage will increase to $8.00 in 2023, $8.75 in 2024, and 9.50 in 2025 until it reaches the $10 threshold. Smaller businesses with fewer than 20 employees will have a slower phase-in increasing the minimum wage with less annually.
“American workers today compete against millions of illegal immigrants for too few jobs with wages that are too low—that’s unfair,” Senator Cotton said in a statement. “Ending the black market for illegal labor will open up jobs for Americans. Raising the minimum wage will allow Americans filling those jobs to better support their families. Our bill does both.”
The legislation will mandate E-Verify to "ensure the wage increase only goes to legal workers." The legislation proposes raising civil and criminal penalties on companies hiring unauthorized aliens.
The current state of federal minimum wage
Most Americans favor raising the federal minimum wage, which was last increased in 2009.
Many cities and states have enacted their own hikes, including in Republican-leaning states like Florida. A majority of states in the U.S. now decree a minimum wage above $7.25.
Critics of a $15 minimum wage, including most Republicans, argue that a hike is bad for businesses that are also dealing with the ongoing coronavirus pandemic.
“Everybody’s trying to paint this whole thing with one broad brush stroke,” John Horne, owner of the Anna Maria Oyster Bar in Bradenton, Fla., told Yahoo Finance previously. “$15 [minimum wage] is fine in Miami… but it’s not good in a small town, you know?”
Others chimed in to stress how a federal standard would ignore sensitivities of specific regions.
“I’m a firm believer that maybe the government does not need to set a minimum wage and let the local markets dictate what the minimum wage is,” John Motta, chairman of the Coalition of Franchisee Associations, said during a press conference on February 17. “I believe that a straight out $15 minimum wage is not fair, that it should be tiered based on first-time teenagers versus a full-time employee.”
States that hiked their minimum wages, he added, “did it in a way where businesses can absorb that increase and run their businesses accordingly,” he added, but “doing it as quickly as the Biden administration is stating will definitely hurt businesses, will hurt jobs, and probably cause some businesses to close because they jus cannot compete and pay those wages.”
Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova
Aarthi is a reporter for Yahoo Finance. She can be reached at [email protected] Follow her on Twitter @aarthiswami.
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