You might not think about America’s federal minimum wage often, but it’s actually pretty important.
Most states have higher minimum wages than the federal standard ($7.25/hr). But five states still don’t have a mandated minimum wage, and two states have minimum wages lower than the federal standard.
In both cases, people are paid the federal minimum wage by default. But the federal minimum wage isn’t enough.
The 2021 Raise the Wage Act proposes increasing the federal minimum wage incrementally each year until it reaches $15/hr in June 2025. Earning $15/hr in 2021, a new home would cost 11.65 years of your salary (before taxes).
That isn’t to say that minimum wage jobs alone are intended to earn you a brand new home, but understanding how far $1 goes is an important part of the minimum wage conversation.
And realistically, $15 an hour by 2025 probably won’t be a living wage. But it’s a hell of a lot better than $7.25.
Think about it –– could you survive earning $7.25/hr, working 40 hours/week?