Regional Minimum Wage Bill Introduced

April 12, 2019

A group of House Democrats have introduced a bill that would create five federal minimum wage rates for groups of cities that could range from around $11.50 to $15.10 depending on their relative cost of living.

The Phase-in $15 Wage Act (H.R. 2080) would group every U.S. metro area into one of five tiers based on Bureau of Economic Analysis (BEA) cost of living data and calculate a national average minimum wage for the middle-tier by taking 50% of the average hourly wage of private sector, non-supervisory workers in that group of cities.

The increase would be phased in over six years (2019 to 2024) with the minimum wage for the lowest cost of living group of cites immediately increasing to $8.10, and then rising to $11.50—highest cost of living cities would start at $10.60 and rise to $15.10.

Communities and rural areas not designated as a metropolitan statistical area would fall under another tier corresponding with their cost of living as designated by the BEA.

Tipped and non-tipped workers would both be covered by the minimum wage rates and state and local governments could continue to set higher rates.

Outlook:  The bill addresses a concern many have expressed about a one-size-fits-all-regions minimum wage, but also complicates the ability for the House to pass any minimum wage bill with many Democrats voicing concern about impacts on small businesses in their communities.