SALT LAKE CITY, Utah — Since 2009, the federal minimum wage has stayed stagnant at $7.25 an hour. Now, President Joe Biden has proposed hiking that wage to $15 an hour as part of his proposed $1.9 trillion coronavirus relief package.
A 2019 study from the Congressional Budget Office found raising the federal minimum wage to $15 an hour by 2026 would boost earnings for at least 17 million people — but could lead to 1.3 million job losses, according to NPR.
In 2016, New York and California became the first states to pass legislation that would gradually raise the minimum wage to $15 per hour in each state. This was followed by Massachusetts in 2018.
House Bill 284 — now before the Utah Legislature — would increase the minimum wage in the state to $12 an hour in July and bump it to $15 by 2026. The bill also raises the minimum wage for tipped employees to $5 an hour from the current minimum of $2.13 an hour, as required under the federal Fair Labor Standards Act.
Minimum wage hike in Utah
Rep. Clare Collard, D-Magna, joined Dave Noriega and Molly Davis of the Libertas Institute of Utah Friday to explain her bill.
“Why is it important here in Utah to raise the minimum wage up to $15 an hour?” Dave asked.
“The average age [nationally] of a person making minimum wage is 31 years old,” Collard said. “89% are not teenagers. They’re over the age of 20 and 37% are over 40 years old. Interesting fact is 56% are women, and 28% of those women have children. 57% are working full time.”
“I reached out to the Department of Workforce Services to try to figure out how many minimum wage jobs are here in Utah,” Dave replied. “And they said they’re doing the research right now they’re trying to update their models.”
Wage bump amid the pandemic
Mark Showalter, department head of economics at BYU, joined the show to explain what this would look like for the economy and job market in rural Utah.
“Is $15 an hour too ambitious?” Dave asked.
“Well, it’s going to be more disruptive,” he said. “That’s going to put a lot of pressure on small businesses, especially those that don’t have a lot of flexibility — flexibility that an Amazon or Walmart might have is not gonna be the same as somebody who’s operating a grocery store or street corner vending place.”
“This feels like a pretty heavy burden to put on businesses that are already struggling to survive amidst the pandemic,” Dave replied. “And I’m wondering, your take on rural smaller businesses, the rural part of the state of Utah and how this could impact them over time.”
“Well, I agree that it will be more disruptive for places where wages now are lower than they are, say, on the Wasatch Front,” Showalter said. “It will lead to higher job losses likely in those places that currently, where the change is going to be much more dramatic in relative terms. I think this will be quite a bit more of a burden on a relatively small group and especially groups that have been harmed by the pandemic.”
Dave & Dujanovic can be heard weekdays from 9 a.m. to 11 a.m. on KSL NewsRadio. Users can find the show on the KSL NewsRadio website and app, a.s well as Apple Podcasts and Google Play.
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