A federal minimum wage increase wouldn’t necessarily be a widespread cash infusion for teens working starter jobs, new research says.
Millennials and Generation Xers would, by far, be the biggest beneficiaries of a proposed federal minimum wage hike to $15 an hour, the Economic Policy Institute said as it determined who across America could stand to gain from a wage increase.
The left-leaning think tank looked at the potential impact of a proposed law that would bring the federal minimum wage to $15 an hour by 2024 from its current $7.25 rate, which proponents say would only keep the minimum wage apace with rising costs.
Who benefits from the minimum wage? ‘It’s people who are on average the primary breadwinner of the family, one-third are married, majority women and disproportionately people of color.’
The minimum wage hasn’t changed since 2009.
A mere 9% of the 39.7 million workers who would directly and indirectly benefit from the raise were 19 and younger.
More than half of workers, 53%, who would benefit were between the ages of 25 and 54. Workers aged 55 and above accounted for the remaining 14.6% of estimated beneficiaries.
The millennial generation runs from 22 to 38 and members of Generation X are aged 39 to 54, according to the Pew Research Center.
Some minimum wage increase opponents have argued that teens and secondary earners, those making money in a household but not the top earner, would benefit most, said David Cooper, senior economic analyst at the Economic Policy Institute. Small business owners say it would increase the cost of doing business and, ultimately, cost people jobs.
But Cooper noted his organization has for several years been analyzing who would benefit from federal minimum wage increase bills and the profile stays constant. “It’s not teens. It’s people who are on average the primary breadwinner of the family, one-third are married, majority women and disproportionately people of color.”
Small business owners say increasing the minimum wage would increase the cost of doing business and, ultimately, cost people jobs.
Teens aren’t as likely as they once were to be in minimum-wage jobs because more teens are staying in high school and college, while older members of the workforce are staying on the job for longer, according to Cooper.
Bureau of Labor Statistics figures said the labor-force participation rate for teens was 35% in July 2017. It was almost 53% in 2000.
The push for a $15 an hour minimum wage faces an uncertain future, especially with a Republican-controlled Senate. Arguments against minimum wage increases include the idea that hikes cut into companies’ bottom lines, forcing them to scale back their hiring or pass along costs to consumers.
A handful of states, like New York and California, have $15 dollar minimum wage laws on the books. San Francisco and Seattle also have $15 dollar minimum wage laws. Amazon
increased its minimum wage to $15 last year, and Target
said it will do the same by 2020.
The biggest winners from any increase would be working around their peak earning years. There’s no strict boundaries on when people are in their money-making prime, because of variables like the career path they’ve chosen.
Still, the salary website PayScale concluded that a woman’s salary growth levels off during the early 40s and men reach their salary peak around their 50s. Federal tax rules typically let people tap their 401(k)s without any penalties at age 59 ½ and Social Security retirement benefit start at age 62.
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