The House just voted to give 33 million workers a raise—here's what has to happen to make it a reality

U.S. Speaker of the House Rep. Nancy Pelosi (D-CA) holds up seven-year-old Kassidy Durham of Durham, North Carolina, during a news conference prior to a vote on the Raise the Wage Act July 18, 2019 at the U.S. Capitol in Washington, DC.
Alex Wong | Getty Images News | Getty Images

On Thursday, the U.S. House of Representatives voted to pass legislation that would raise the federal minimum wage from $7.25 to $15 over the next six years. Yet the new standard has a long way to go before it could affect your wallet.

The Raise the Wage Act, introduced Rep. Bobby Scott (D-Va.) in January, would effectively raise wages for 33 million workers, according to an analysis by the Economic Policy Institute. Nine in 10 of those workers potentially affected by the wage hike are over the age of 20 and 58% of them are women.

A report from the Congressional Budget Office released last week predicted a slightly smaller impact, reporting the bill could increase wages for as many as 27 million Americans and potentially lift 1.3 million families out of poverty.

Under the Raise the Wage Act, the federal minimum wage increases would roll out on a gradual schedule:

  • $8.40 in 2019
  • $9.50 in 2020
  • $10.60 in 2021
  • $11.70 in 2022
  • $12.80 in 2023
  • $13.90 in 2024
  • $15.00 in 2025

In addition to raising the minimum wage, the legislation would also eliminate the separate minimum wage standard for tipped employees. Currently, employers can pay tipped employees a minimum of $2.13 an hour, as long as their tips push them beyond the $7.25 hourly federal minimum. The Raise the Wage Act would also create an equal minimum wage for Americans with disabilities.

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What needs to happen to make $15 minimum a reality

While the House passed the legislation, its implementation is far from a sure thing. Predictive intelligence firm Skopos Labs estimates the Raise the Wage Act has a 24% chance of being enacted. That's because identical legislation would have to pass the Senate and then be signed into law by President Trump.

Mitch McConnell (R-Ky.), the majority leader, said Thursday he will not be taking up the legislation in the Senate.


And Thursday's House vote was far from bipartisan, with only three Republicans voting to pass it. Many Republicans cited concerns that a $15 federal minimum wage may cause significant job loss. A report from the Congressional Budget Office released last week found that a mandatory $15 minimum wage may eliminate as many as 3.7 million jobs across the U.S. because companies will look to cut costs.

Why advocates say minimum wage needs to increase

It's been 10 years since Congress set the current federal minimum wage at $7.25. In recent years, some cities and states have taken steps to increase local minimum wage statutes, but there are still 21 states where the minimum wage remains frozen at $7.25.

Yet wages simply are not keeping up as day-to-day costs continue to soar. Pew Research found that the average paycheck has the same purchasing power it did 40 years ago. A worker making the federal minimum wage cannot afford to rent an affordable two-bedroom apartment anywhere in the U.S., according to research from the National Low Income Housing Coalition.

Dougleshia Nicholson, a single mother of six, tells CNBC Make It that trying to survive on minimum wage in Kansas City, Missouri is a "constant struggle." Nicholson, 28, makes $8.60 an hour, $1.35 more than the federal minimum wage, thanks to a recent state increase. She says it's still not enough money to get by, especially since her hours (and paycheck) can vary significantly week to week.

When it was signed into law in 1938 by Franklin D. Roosevelt, minimum wage was designed to provide workers a livable salary. Yet Nicholson's typical 20 hours a week at Church's Chicken adds up to about $8,300 annual pay, far below the $78,407 the Economic Policy Institute estimates a family of four needs to live modestly in Kansas City.

Roughly 36% of U.S. workers earn less than $15 an hour, according to estimates from the EPI. Research shows women and minorities are disproportionately affected by the minimum wage issue.

Although the path to a $15 national minimum wage is far from over, proponents vowed to keep fighting on Thursday.

"We're celebrating the House vote today, but tomorrow, we'll turn right back to the fight. Our eyes will be on the Senate and on President Trump," says Fran Marion, a McDonald's worker in Kansas City and a member of the "Fight for $15 and a Union" campaign.

The coalition plans to hold rallies in 10 cities on Friday, including Chicago, Los Angeles and Miami, to raise awareness and demanding McDonald's raise its wages to $15 an hour.

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