- Democrats want a $15 minimum wage policy to be included in President Joe Biden’s $1.9 trillion Covid relief plan.
- A $15 hourly pay scale would more than double the current $7.25 federal minimum wage.
- It still wouldn’t offer a living wage to low-paid single adults and families in many areas, according to a CNBC analysis of state cost-of-living data.
A $15 minimum wage could become a reality in the U.S.
While millions would get a pay boost from a higher national wage floor, it would still fall short of paying many workers a “living wage” — the salary a person or family needs to cover their basic expenses.
That’s especially true for families, largely due to higher living costs like childcare, relative to single adults.
Even with a raise to $15 per hour, a typical family of four couldn’t afford the basics in any U.S. state, according to a CNBC analysis of cost-of-living data assembled by researchers at the Massachusetts Institute of Technology. (This example assumes two kids and two adults working full-time for minimum pay.)
The data weighs costs like food, childcare, health care, housing, transportation and other necessities. It doesn’t include income from safety net programs for the poor.
Single adults without kids would generally fare better than families, according to the analysis. But, in about half of states, the cost of living would still eclipse earnings for workers paid $15 an hour.
The shortfalls would generally be greatest for workers in the West and Northeast — in states like California, Hawaii, Massachusetts and New York, as well as the District of Columbia — where the cost of living and taxes tend to be higher.