Presidential candidate Elizabeth Warren wants to raise the minimum wage to $15.
According to her newly-released “Empowering American Workers and Raising Wages” plan, the Democratic Massachusetts Senator noted that she wanted to raise the federal minimum wage to $15 an hour for all workers, including tipped workers and workers with disabilities.
“I will fight to pass the Raise the Wage Act,” she added, referring to the bill that was passed in the House in July. “While I push to enact that legislation, I will sign an executive order on the first day of my administration to require all federal contractors to pay a $15-an-hour minimum wage.”
The bill, which has yet to pass the Republican-controlled Senate, addressed the fact that the federal minimum wage has been stuck at $7.25 an hour since 2009, the longest stretch of time that America has gone without an increase in the number.
The bill aims to incrementally raise the number to $15 an hour by 2025, after which it’ll be pegged to median wages. The bill would also do away with the lower minimum wage allowable for tipped workers. That has been $2.13 since 1996.
“Currently, the statutory maximum penalties for these kinds of violations are laughably small and fail to adequately deter misconduct,” she wrote. “For example, according to the Department of Labor, the statutory maximum penalty for willful or repeated violations of minimum wage and overtime laws is just $1,000, and the statutory maximum for willful or repeated violations of child labor laws is just $10,000. I will push to substantially increase these maximum penalties so that employers don’t view violations as the cost of doing business.”
Minimum wage hurting some businesses
Some business leaders are on board. Founder of burger chain Shake Shack Danny Meyer told Yahoo Finance in July that “it’s probably a good idea.” JPMorgan Chase’s Jamie Dimon agreed. “We’ve got to give people more of a living wage,” he told Yahoo Finance in the same month.
And several big retailers have raised minimum wage, from Amazon to Costco to Walmart.
Amazon’s Jeff Bezos emphasized the point in his annual shareholder letter back in April.
“Today I challenge our top retail competitors (you know who you are!) to match our employee benefits and our $15 minimum wage,” he implored. “Do it! Better yet, go to $16 and throw the gauntlet back at us. It’s a kind of competition that will benefit everyone.”
But critics have argued that a higher minimum wage hurts business.
“Good intentions are no excuse for imposing bad policy,” Rachel Greszler of the Heritage Foundation, a conservative think tank, previously told Yahoo Finance. “The Raise the Wage Act is a misguided attempt to increase incomes. In reality, it will eliminate jobs and decrease incomes for workers with the fewest skills and least experience.”
In New York City, Gabriela’s Restaurant and Tequila Bar on the Upper West Side said it was closing soon. The owners say the minimum wage hike to $15 an hour had forced them to slash staff from 60 to 45, which has in turn affected customer traffic and spending.
In West Hartford, Connecticut, a ShopRite supermarket said it was closing over the weekend because of poor business and a higher minimum wage. The number rose from $10.10 an hour to $11 an hour on Tuesday, and by 2023, it will reach $15.
In San Francisco, DOSA on Valencia, a South Indian restaurant, closed this week because of rising rent and labor costs, which included a higher minimum wage.
“Look, we value our small businesses. Government is not focusing on the backbone of our country in this category, small business, micro business in particular, the true driving force and economy of this city,” New York City Councilman Mark Gjonaj told Yahoo Finance’s The Ticker. “It's just not minimum wage. Employers want happy employees, employees that can afford a decent quality of life.”
He added: “It's up to government to be more proactive in making sure that we are able to have these small businesses continue operating in New York City.”
Aarthi is a writer for Yahoo Finance. Follow her on Twitter@aarthiswami.