Raising the Minimum Wage Every Year (S. 2223)

What is S. 2223?

(Updated April 25, 2021)

This bill would increase the federal minimum wage from $7.25 per hour to $8.20 per hour six months after the date the bill was signed into law. The bill would authorize two more minimum wage jumps as well: to $9.15 an hour one year after the first increase, and to $10.10 an hour two years after the increase to $8.20. A fourth jump would also occur three years after the initial increase and every year thereafter. Those jumps would be based on the Consumer Price Index. 

The bill would also increase the federal minimum wage for tipped employees to $3.00 an hour six months after the bill was signed into law, and provides a formula for  subsequent annual adjustments of the minimum wage for tipped employees. 

Finally, the bill raises the cap on expensing allowances, increasing it $500,000 for business assets, including software, and treats "qualified real property" (such as restaurant property) as "depreciable business property."

Argument in favor

Raises the federal minimum wage in increments, allowing the economy to calibrate. Disallows the minimum wage from being raised and then forgotten about for years. The current rate of $7.25 per hour is not a living wage.

Argument opposed

A state, as opposed to federal, issue. Would drive up costs of goods and services. On the other end of the spectrum, the raise is far too low: adjusted for inflation, the minimum wage should be over $20 an hour.

Impact

The bill impacts the federal minimum wage and taxable business expenses.

Cost of S. 2223

While the math here is complicated, and depends on a number of variables, including application of microeconomic analysis, the CBO estimates that direct spending would increase by $2 million over the next decade.

Additional Info

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