The Democrats in Congress will probably fail to pass a federal $15 an hour
In an age of grassroots political campaigns, the
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In addition to having a catchy, alliterative slogan, Fight for $15 had some pretty decent economics on its side. The fact that “teenagers like cheeseburgers,” in the words of economist
At the national level, Fight for $15 hasn’t yet managed to chalk a win. The minimum-wage proposal was struck from President Joe Biden’s recent COVID-19 relief bill on the grounds that it wasn’t a fiscal measure and thus not eligible to be passed by budget reconciliation. Since reconciliation is the only way to get around the filibuster, that means that a federal $15 minimum wage has only a slim chance of passing during Biden’s presidency. Worries that $15 would go too far in low-cost areas will mean sufficient opposition at the federal level that we probably will not see this sort of bill pass soon — or if a wage hike does pass, expect something significantly less than $15.
Yet despite this failure, Fight for $15 is winning a different way: by altering the norms of wage-setting in the U.S. Fast-food merchant McDonald’s Corp., the archetypical low-wage employer,
Notice that not all of these wage increases are the same — some represent average company wages, while others represent a minimum floor for pay. But all of them involve the same number — $15. This suggests that the psychological impact of that number has exerted a psychic power over corporate America, and over workers’ wage demands and expectations. Collectively, we’ve simply decided that $15 is the standard minimum for what any job ought to pay.
Economists have long recognized that human psychology plays an important role in the setting of wages. Nobel winner George Akerlof
It’s possible that before Covid, these norms were already shifting, helping — along with Fight for $15’s legal victories in states and cities — to
The spread of the $15 standard is a testament to the power of the Fight for $15 campaign, but also to its limitations. Because $15 isn’t adjusted for inflation, a period of rapid consumer prices increases could render the wage victory useless in terms of increasing workers’ real purchasing power. In fact, if inflation stays high, the $15 anchor could ultimately prove counterproductive, making it hard to raise wages even higher to keep up with prices — “fight for $18.50” just doesn’t have the same ring.
Hopefully inflation is a blip, and the $15 wage norm has taken deep root in the American psyche. The 2010s saw low-wage workers start to make up some of the ground they had lost in the wage stagnation of the 2000s, but it wasn’t enough. If the power of human psychology can be harnessed to change what it means to pay a fair wage in America today, so much the better.