US labour activists push for $20 per hr minimum wage as inflation persists

Just years after labour activists persuaded a handful of states to raise their minimum wage to USD 15 per hour, workers initially thrilled with the pay bump are finding their hard-won gains erased by inflation.

New York City resident Anthony Rivera, 20, who sorts packages at a United Parcel Service facility in Brooklyn, said he had to take a second job at a grocery store after his food costs soared.

I was sitting at USD 15 an hour at UPS, and when it came to paying bills and buying groceries, it was starting to become not enough, he said. That led me to no other option than to pick up another job.

 

New York, California and Massachusetts are among states where pro-labour forces are now pushing proposals that, if approved, would boost minimum wages to USD 20 or more in the coming years.

Inflation has meant that something that cost USD 15 in 2012 when labour activists adopted the Fight for USD 15 slogan in a push for wage hikes would probably cost almost USD 20 today, according to the US Bureau of Labour Statistics.

But opponents to the wage hikes say they can be detrimental to small businesses, which already took a major hit during the coronavirus pandemic.

Cindy Lee, the owner of a bowling alley in Endicott, New York, said she's struggling to pay off loans taken out during the pandemic that kept her business afloat.

All this cost all at once is just going to kill us. I definitely will have to cut corners somewhere with employees if wages are raised, said Lee, adding that she'd also have to increase prices on bowling, food and liquor.

The federal minimum wage in the United States has stayed at USD 7.25 per hour since 2009, but states and some localities are free to set higher amounts. Thirty states have chosen to do so.

Over the past decade, labour groups held out USD 15 as the target that would let low-paid workers sustain themselves within the 40-hour workweek. A growing number of states across the political spectrum have passed legislation that will take their minimum wage above that amount in the next few years, including Florida, Nebraska and Illinois.

Eleven states have phased in wage increases of USD 5 or more within the past decade.

Yet those gains were almost immediately tempered. Inflation in the United States hit a new 40-year high last summer after prices for basic necessities like gas and food soared. Supply chain issues resulting from the coronavirus pandemic, combined with Russia's invasion of Ukraine, have disrupted gas and food supplies, sending those prices skyward.

Labour activists are pressing for a new round of wage increases even as the old ones are still being phased in.

A bill in New York would raise the state's minimum wage to USD 21.25 by 2026, and then adjust it each year going forward for inflation. Right now, minimum wage workers in New York City get paid USD 15, while the rest of the state is at USD 14.20.

In Massachusetts, one bill proposes to raise the wage every year until it hits USD 20 in 2027, up from USD 15 now.

And in California, where the minimum wage is currently USD 15.50 for all workers, legislation signed in September would have set the state on a path to raise wages for fast-food workers to USD 22 per hour. The law was met with heavy opposition from restaurant industry groups who led a successful effort to force it into a referendum vote in 2024.

Backers of a proposed wage increase in New York say they hope it will pass as part of the state budget, which is expected to be finalised in early April.

You can't tell us that after the pandemic, that USD 15 is going to still be enough for us to keep food on our tables, said state Sen. Jessica Ramos, a Democrat who represents parts of Queens, said at a rally in Albany. That's why we want USD 21.25, nothing less. The price of everything is going up except for wages.

In her executive budget proposal, New York Gov. Kathy Hochul, also a Democrat, proposed tying minimum wage increases to inflation, but with a cap on how much wages could rise in any one year.

Barry Nicholson, the owner of four retail businesses in Corning, a city by the Finger Lakes in New York, said a wage increase to USD 21.25 would be a smack in the face to small businesses.

There is just no way I could handle that," said Nicholson, who owns two UPS stores, and women's accessories and modern home furnishings stores. When you look at retail hospitality, we live and die by a couple of points at the end of the day. We're not the big corporations everyone talks about.