A 15 minimum wage could boost Social Security benefits

How’s that for a headline? Too bad it’s not accurate, intentionally misleading and from a far, really far left organization. At the same time the Congressional Budget Office (CBO) says the impact will be negligible.

Don’t believe me! Follow them in Twitter for a few days.

Some Washington lawmakers are pushing to raise the federal minimum wage to $15 per hour to put more money in workers’ pockets. The wage bump could also eventually provide a boost to their Social Security benefits. The current federal minimum wage of $7.25 has stayed where it is since 2009. At the same time, workers contribute 6.2% on wages of up to $142,800 in 2021 to Social Security. Employers, in turn, match that 6.2% contribution. (If you’re self-employed, you pay 12.4% in Social Security taxes.)

Social Security Works, an advocacy group for expanding Social Security, finds in a new report that the proposed minimum wage hike could help improve retirement security for those workers. “If you look at the workers that earn under $15 an hour now, that is a very strong reason to update it,” said Nancy Altman, president of Social Security Works.

If they claim their Social Security benefits in 2021 at full retirement age (the age at which they are eligible to receive 100% of the benefits they earned), they will receive monthly checks of $979.80, according to Social Security Works.

In contrast, had they earned $15 per hour, their monthly benefit would be $1,409.60.

That would be an annual increase of $5,157.60, according to the report.

There are a number of questionable assumptions in all the above. Only 1% of workers age 25 and older earn the minimum wage. And only 1% are married. Here are the facts on minimum wage workers.

This isn’t about raising the minimum wage which can be justified, it’s about truth presenting the facts and consequences.

Source: How a $15 minimum wage could boost Social Security benefits

6 comments

  1. Raising the minimum wage to $15 will raise wages for all workers making less than $15, NOT just minimum wage workers. So, saying that – “Only 1% of workers age 25 and older earn the minimum wage. And only 1% are married,” is just spin Richard. 29 million workers will see a pay raise and that means their employers will pay more in FICA taxes and they will receive larger Social Security benefits, in retirement. It is way passed time to raise the minimum wage and index it to inflation.

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    1. Not only that, but people earning $16, $17, $18 will expect a raise as well. Employers will indeed pay more in SS and other payroll taxes. The started salary for teachers in many lower income states will be affected. Can you think of any possible consequences of all that? And after all the impact is made MW workers will still be MW workers and some may lose some or all of their government assistance. Raise the MW by all means, index it for sure, but keep in mind everything related will adjust as well.

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      1. Correct Richard – But the same kind of things happen in the economy every day. When taxes, utilities, supplies, etc go up for business prices go up. And when priced go up consumers make choices on what they spend money on. If steak price is too high I chose hamburger. Low wage workers will be better off making more money, every time my pay went up I was better off, that had not changed.

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      2. I suspect that every time your pay went up it was the result of a promotion, voluntary act by employer, union contract and generally reflected the employers ability to pay more and the need to deal with inflation. None of that is the case with a $15 minimum wage. The majority of MW workers are in small business. My point is that after all is said and done these workers will be no better off. The MW should have been raise years ago and then adjusted for inflation each year. To apply such an increase nationally will harm lower income areas of the country.

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      3. So, I guess it is ok, if you are a low wage worker. who does not have union representation you are s. o. l. Many people working low wage jobs are working for small businesses, who’s owners are millionaires. The guy who owns the 3 McDonalds in my town of 50,000 is worth millions. I know this because my daughter worked for him for 2 years and never received a pay raise, but the price of the food, went up. Maybe it is good that the government can and should set the wage floor. After all we are the richest country in the world, I think we can afford it.

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  2. Were are the fact checkers on this one? I rated it as partly true. That is if you make more money, no matter how, more social security taxes will be taken out and you may be eligible for a higher benefit when you retire depending on your work history and number of years that you worked. I did not verify their numbers. If you retired in 2021 making $15 /hr for the 10 years prior, you were not a minimum wage earner but you had a very good job that paid double the minimum wage and you should be collecting more. So one could say if you get better job skills and get paid more, that your benefits will be higher too.

    What I am waiting for and I have seen some anti $15 /hr memes of people demanding that social security benefits be raised to at least minimum wage levels. Currently the lowest possible social security benefit that you can qualify for is $10,470 / yr. The average social security benefit for January 2021 is $18,516 per year. Someone making the proposed $15 /hr minimum wage would make $31,200 / yr. How long before people demand that retirees get at least $31,200 / yr for doing nothing at home because they earned it?

    Could Social Security recalculate the minimum benefits based on available funds and the new minimum wage and those benefits end up being lower than this article assumes? Sure, after all, the only thing that happen was bottom of the wage scale move up but benefits do not have to move since they would still be the bottom of the scale.

    As a retiree, I retired assuming that my income was fixed and I will get no raises or COLAs and that there will be inflation over time. That is the reality. I also assumed since high school that social security would not be there. Hopefully Congress will fix social security before they have to cut benefits in 2034.

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