Is a $15 an hour minimum wage coming to the United States?

The political push

President Joe Biden’s administration is aiming to raise the federal minimum wage to $15 an hour, nearly twice the current $7.25 an hour set in 2009. His plan would raise the rate gradually until 2025 and make the U.S. minimum wage one of the highest in the world.

In February 2021, the Congressional Budget Office said this proposal would increase wages for about 27 million workers while reducing total employment by 1.4 million. Proponents of raising the wage say it would lift millions out of poverty. Opponents say it will reduce the number of jobs available for low-wage employees and raise the cost of goods.

It's unclear whether the provision will pass through Congress. Nevertheless, opinion polling shows roughly two-thirds of Americans support raising the wage. Twenty-nine states already require workers be paid more than the federal minimum wage and some – most notably California – are already on a path toward $15 an hour.

Impact on the chicken industry

Raising wages would likely reduce the number of total employees in poultry processing and will certainly provide greater financial incentive for processors to automate positions in the plant.

Due to the nature of the work, processors must pay a premium for low-skilled labor. The average hourly wage of the chicken processing industry, according to PayScale.com's salary data, is about $13.71. If wages are raised nationally, processors need to significantly increase wages, too.

Economic studies agree raising the minimum wage gradually would not necessarily have a significant effect on commodity prices in general, because labor is only one factor in the costs of goods. That could mean integrators would not be able to raise their prices to match higher labor costs.

Already, integrators are purchasing machinery designed to reduce the number of workers on the intensive and high-turnover deboning line. A higher wage could hasten automation by providing a greater potential return on the integrator’s initial investment.