For decades, workers making below
the median wage have experienced stagnant wages
Wage increases have gone largely to the highest earners.
Weekly earnings of employed, full-time wage and salary workers
Source: Bureau of Labor Statistics
Meanwhile, housing prices have risen 27%…
…and the cost of college tuition has risen 100%.
A Balanced Solution
This past year, the problem has been made worse by unprecedented layoffs, reduced hours, and income disruptions due to the government shutting down the economy over the coronavirus pandemic. Senator Josh Hawley has introduced two bills that would result in an immediate wage increase for millions of workers while avoiding a one-size-fits-all increase that would disadvantage small businesses.
$15 Minimum Wage for Billion-Dollar Corporations
For decades, the wages of everyday, working Americans have remained stagnant while monopoly corporations have consolidated industry after industry, securing record profits for CEOs and investment bankers.
Mega-corporations with revenues of $1 billion or more can afford to pay their workers $15 an hour, and it’s long past time they do so, but this should not come at the expense of small businesses already struggling to make it.
Blue-Collar Bonus: A Pay Raise for American Workers
Senator Hawley believes higher wages for blue-collar workers are long overdue and that’s why he wants to provide a bonus to every worker making below the median wage.
Workers would receive the bonus directly through an automatic, advanceable tax credit tied to hours worked. Unlike other proposals to raise wages, this plan does not place a major new burden on small businesses, many of which are still recovering from harmful shutdowns.
“Wages for blue-collar workers have been stagnant for decades. And government made the problem worse by shutting down the economy a year ago. It’s time we give blue-collar workers some respect and a pay raise.”
Senator Josh Hawley
HOW IT WORKS
The Blue-Collar Bonus Tax Credit
Credit Amount
The credit is worth 50 percent of the difference between the median wage and the worker’s hourly wage rate. In other words, the credit would boost per hour wages 50 percent closer to the median. The median wage is set at $16.50 per hour and will be indexed to inflation. The credit is allowed for a maximum of 40 hours per week and phases out at the median wage.
- Example: An American worker making $12 per hour would be eligible for a $2.25 per hour credit [(16.50-12.00)/2]. The maximum credit would be for 40 hours of work per week, or 2080 hours over the course of a year, allowing this full-time worker a total credit of $4,680 for the taxable year. This worker can expect to receive four distinct payments of $1,170 from the IRS.
Eligibility
American workers who hold a valid social security number and earn below the median wage as calculated on an hourly basis.
The existing quarterly employer payroll tax reporting regime would be updated to include wage levels and hours worked for each worker who earns below the median wage. Following the submission of each tranche of quarterly wage data from employers, the IRS would send an advanceable “Blue-Collar Bonus Credit” to the eligible worker in the same payment manner by which they currently receive their tax refund, including direct deposit. Each eligible individual would receive four payments a year based on the hours they work.
Protections are included to ensure program integrity and would bar those who committed fraud from receiving the credit in the future. The credit would be implemented on a temporary basis to boost take-home pay during the economic recovery and sunset after three years.