President Joe Biden’s student debt relief plan includes another step toward normalizing the $15 minimum wage:
Raise the amount of income that is considered non-discretionary income and therefore is protected from repayment, guaranteeing that no borrower earning under 225% of the federal poverty level—about the annual equivalent of a $15 minimum wage for a single borrower—will have to make a monthly payment [The White House, Fact Sheet: “President Biden Announces Student Loan Relief for Borrowers Who Need It Most,” 2022.08.24].
This plank of the student debt relief plan doesn’t raise anyone’s wages, but it reinforces the idea that $15 an hour is a proper floor for wages. CNBC gives some more details on raising the non-discretionary income threshold:
Under current rules, a borrower with income of less than 150% of the federal poverty level qualifies for a $0 monthly loan payment. In 2022, that equates to roughly $20,385 before tax for a single individual — about $9.80 an hour for a full-time worker.
President Biden proposed raising that threshold to 225% of the federal poverty level — about $30,577.50 of annual income, or $14.70 an hour [Greg Iacurci, “President Biden Used Student Loan Reform to ‘Push the Idea that $15 Should Be the Minimum Wage,’ Expert Says. Here’s How,” CNBC, 2022.08.25].
President Biden has set $15 an hour as the minimum wage for federal employees and contractors. South Dakota’s Board of Economic Development has set $15 as the minimum wage worthy of state REDI Fund loans. As we have noted previously, $15 an hour still isn’t enough to cover family needs.