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Why federal minimum wage remains unchanged after 13 years

Yahoo Finance reporter Dani Romero explains how many American workers are struggling to make ends meet in the inflationary environment as minimum wage as remained unchanged for 13 years.

Video Transcript

SEANA SMITH: All right, the federal minimum wage has gone unchanged for 13 years. It currently sits at $7.25 an hour. With inflation up, many workers are struggling to keep up and just make ends meet. We want to bring in Yahoo Finance's Dani Romero, who joins us now with more. And Dani, this has been unchanged, like I just said, for over a decade. Prices have significantly increased since then. What's the disconnect?

DANI ROMERO: Well, it's obviously, there's a really big disconnect. I mean, over a decade now. But with the federal minimum wage sitting at $7.25, if you calculate rough estimate, that's about $15,000 per year for full-time. Now, some states have obviously taken the initiative and increased their state minimum wage. For example, Seattle is one of them. They've increased their minimum wage to $17.27 for larger employers and smaller employers.

And but still, 20 states are lagging behind. And some states don't even have a state minimum wage. Last year, President Biden signed an executive order to increase the minimum-- the federal minimum wage to $15 an hour by 2024. But that was stalled in the Senate. And there really hasn't been much movement since then.

Now, on the bright side, we have seen some retail giants like Target, fast food chains like Chipotle, increase their minimum wage. And not only that, they've also had a signing bonus for low entry level workers. So you're really seeing that initiative being taken on, kind of a steady movement not only in regards to the private-- but in the private sector, mostly, so.

DAVE BRIGGS: Yeah, you've got a really tight labor market, which is going to force wages up. Plus you've got a unionization push across the country, which will also push wages up. So there is some good news for the worker. Dani Romero, thank you. Good stuff.