The fair wage adjustment act will address the challenges of wage inequality, inflation and small business instability by gradually increasing the federal minimum wage to $11 per hour over five years.
(75 cent raise each year to the federal minimum wage)
Year 1: 8.00
Year 2: 8.75
Year 3: 9.50
Year 4: 10.25
Year 5: 11.00
During this process, small businesses will be subject to tax credits and subsidies.
Taxation to wage increases:
Workers whose wages increase as a result of this Act will be required to pay a percentage of the increase in taxes for the first two years after the wage adjustment begins. The tax rate will be calculated based on the percentage increase in their income, with the tax gradually phasing in starting in the third year.
Stimulus for wage decreases:
Workers who experience a reduction in wages due to the wage reset will be eligible for a stimulus check to offset the income loss, at a rate of 50% or 75% of their lost income, depending on the severity of their wage reduction.
Example:
A worker earning $15 an hour that’s reduced to $11 an hour will lose $8,320 in annual income.
75% of that is $6,250 that could be provided via a stimulus check.
Conclusion:
This bill aims to strike a balance between raising the federal minimum wage and minimizing the potential negative impacts on workers, businesses, and the broader economy. By implementing gradual wage increases, providing small business relief, and offering targeted stimulus to those experiencing income loss, the bill seeks to address concerns from both parties and offer a pragmatic solution that can gain bipartisan support.