The House passed a bill on Thursday to double the federal minimum wage to $15 an hour. This would mark the first increase to the rate in more than a decade and the highest increase ever.

A total of 231 members voted in favor of the Raise the Wage Act, and 199 opposed it. Only three Republicans voted for the bill.

Passage of the bill is a victory for fast-food workers, who have been pushing for a $15 minimum wage across the country for more than five years.

“It’s long overdue. It’s what we really need and what we really deserve,” Bettie Douglas, a McDonald’s worker from St. Louis, Missouri, told Vox shortly before the vote. Douglas, who is 61, has been working at the fast-food chain for 13 years, earning the federal minimum wage of $7.25 nearly the entire time.

The Raise the Wage Act would have a huge impact on working families like Douglas’s. The bill is expected to boost pay for 27 million US workers, lifting 1.3 million households out of poverty, according to an analysis released earlier this month by congressional economists.

But the income boost may come with a cost. The Congressional Budget Office says it could trigger 1.3 million job losses for low-paid workers like Douglas. Most recent academic research suggests that’s unlikely and would lead to few — if any — lost jobs.

Passage of the bill follows months of debate between moderate and progressive House Democrats about how high to raise the minimum wage. In the end, to appease moderate lawmakers, House Democrats amended the bill to phase in the $15 minimum wage over seven years instead of six.

But the Raise the Wage Act does much more than lift wages. It will tie future changes to the minimum wage to changes in middle-class pay, and will go far in boosting paychecks for underpaid workers at a time when employers refuse to do so on their own.

It’s not like this will happen anytime soon. After all, the chances of passing a $15 minimum wage in the GOP-controlled Senate are slim to none. Even so, the bill’s passage in the House is a major step forward for low-income families.

The Raise the Wage Act, explained

Congress set a record in June: It had been more than 10 years since lawmakers raised the federal minimum wage, the longest period in history that it’s stayed stagnant.

The current $7.25 minimum hourly rate was set in 2009, right in the middle of the Great Recession. Since then, America’s lowest-paid workers have lost about $3,000 a year when you consider the rising cost of living, according to calculations from the Economic Policy Institute.

In January, House Democrats introduced the Raise the Wage Act, which would eventually raise the federal minimum wage to $15 an hour by 2024. The law would also tie future changes to changes in median workers’ pay. So if middle-class wages go up — or down — so would the minimum wage.

The bill, which had more than 200 co-sponsors (all Democrats), also phases out the lower minimum wage for tipped workers such as restaurant servers and valets, which has been $2.13 an hour since 1996.

Big business groups have not been happy about the fight for $15. Neither have their Republican allies in Congress, who have long pushed back against any effort to raise the federal minimum wage.

But it’s hard to deny how popular the idea is with regular voters. Poll after poll shows widespread support for raising the federal minimum rate, even among Republican voters. And a majority of voters want at least $15 an hour. It’s no wonder why the vast majority of Democrats running for president have promised to double the federal minimum wage.

Corporate America must have sensed the shift in public opinion. McDonald’s executives recently announced that the company would no longer lobby against minimum wage increases. The president of the US Chamber of Commerce said earlier this year that he was open to the idea of raising the pay floor.

For a while, Democrats were torn on how much to raise wages. Rep. Terri Sewell (D-AL) introduced an alternative bill in April, which would create different minimum wage levels depending on the region. Only businesses in the most expensive areas would have to pay workers at least $15 an hour by 2024. The main problem with that bill, though, is that every state needs to hike minimum pay. There’s really nowhere in the country where minimum wage workers can afford to rent a modest two-bedroom apartment if they work full time.

In the past few weeks, however, Democrats signaled that they finally had enough members on board to pass the $15 wage bill this month. And on Thursday, they voted for it. “What the report makes clear is that the benefits vastly outweigh any costs,” Rep Bobby Scott (D-VA), the lead author of the bill, said on a recent conference call with reporters.

No one really knows what will happen with a $15 minimum wage

It’s impossible to predict exactly what will happen if businesses need to pay some employees more than the current $7.25 minimum federal rate. Will they fire some employees to cover the added cost? Will they make customers pay the difference? Will they just decrease benefits? No one can know for sure.

To get an idea, economists look at what has happened in cities and states that have raised minimum pay. The most recent research shows that wage hikes lead to minimal — or zero — job losses.

The CBO report doesn’t necessarily contradict those findings. But it does include a much wider range of scenarios. Yes, there’s a good chance no jobs will disappear, but there’s also a good chance that 3.7 million jobs could. So their median estimate is 1.3 million losses.

Congressional economists also analyzed possible outcomes with a smaller wage increase. A $12 minimum wage, for example, would lead to median job losses of 300,000. A $10 hourly minimum could trigger about 100,000.

CBO used data from 11 studies published in the past four years to come up with its own estimates. The office specifically picked studies that recorded the short-term impact of minimum wage hikes on job losses and gains in low-paid industries. They compared the share of jobs that paid more after a minimum wage hike to the change in overall jobs that were available to the workers affected by the policy changes. That allowed CBO economists to calculate what might happen with a $15 federal minimum wage.

Recent wage hikes gave economists more data to study

The impact of raising the minimum wage is one of the most closely studied — and debated — subjects in economics.

It used to be taken for granted that raising the minimum wage would decrease the number of low-wage jobs, and that teenagers would have more difficulty finding part-time work. Economists published research in the 1970s showing that it did happen, likely because restaurants and department stores had to cut jobs and work hours to cover the cost of paying employees more.

But in the past decade, progressive economists have challenged these assumptions with new data that is now available.

Dozens of Democratic-held cities and states have increased the minimum wage floor over the years, well above the current federal minimum of $7.25 an hour. Recent research suggests the worst-feared consequences of minimum wage hikes did not come to pass: Employment did not decrease in places where wages went up, and there was actually a residually positive effect on wages for other lower-income workers.

Today, there are two things most mainstream economists agree on: First, that raising the minimum wage increases the average income of low-wage workers, lifting many out of poverty (depending on how big the raise is). Second, that raising the minimum wage likely causes some job losses.

However, disagreement often revolves around how extreme the job cuts would be. A new white paper from Anna Godoey and Michael Reich at Berkeley provides more evidence that the impact on jobs is insignificant. (The new Congressional Budget Office analysis, which forecasts 1.3 million job losses from a $15 hourly wage, did not include findings from that study because it was only released this month.)

The Berkeley study found that raising the federal minimum wage to $15 an hour by 2024 would likely boost incomes for the poorest households in rural counties. They found no evidence that such a large wage hike would lead to significant job losses or fewer work opportunities.

The research of Godoey and Reich, who analyzed pay data for millions of households in more than 750 counties, stands out for several reasons. First, it’s the only major pay study that relies on county-level income data, making its conclusions more precise; previous research has focused almost exclusively on state-level data. More local data allowed researchers to get a better sense of what could happen in rural counties, compared to urban centers.

Second, it focuses on the impact of raising pay in areas with the largest share of minimum wage workers. Previous research has mostly focused on cities and states that have already raised the minimum wage, where workers tend to earn more money. And third, it’s the first research paper to analyze a wage hike as high as $15 an hour. Before, the highest pay rate studied was $13 an hour.

To find out how a $15 minimum wage might affect rural areas, researchers measured the gap between the minimum wage and the median wage in those areas if they had a $15 hourly pay floor. Then they compared it to places with a similar gap. That allowed researchers to calculate what might happen in rural counties. They found no negative effects on jobs.

In sum, “the US can absorb a $15 minimum wage, without significant job losses, even in low-wage states,” Godoey told journalists in a recent conference call.

The study also sheds light on how far such a policy change could go to shrink income inequality in some of America’s poorest regions. For example, in Alabama, minimum wage workers currently earn about 45 cents for every dollar earned by a median wage worker. If the federal pay floor were to double, that gap would shrink to 77 cents for every dollar, the study says. The change would also shrink income inequality in states that already have smaller pay gaps, such as California.

The study is hardly definitive, but it adds to a growing body of research that is challenging long-held assumptions about the impact of raising the minimum wage: specifically, the view that it would hurt workers more than it would help them.

The most recent meta-analyses on minimum wage increases, which analyze several research findings together, suggest that the increase’s likely impact on employment would be minimal.

Take the 2016 study by economists at Michigan State University, which crunched data from 60 studies on the minimum wage in the United States since 2001. It concluded that a 10 percent increase in the minimum wage would likely reduce overall employment in low-wage industries by 0.5 to 1.2 percent.

Another meta-analysis comes in a highly anticipated study forthcoming in the Quarterly Journal of Economics by economists at the University of Massachusetts, University College London, and the Economic Policy Institute. They studied data from 138 cities and states that raised the minimum pay between 1979 and 2016. The conclusion is that low-wage workers received a 7 percent pay bump after a minimum wage law went into effect, but there was little or no change in employment. The study also showed that it would not cost jobs, even in states with large shares of minimum wage workers. The latest study by Godoey and Reich, which expands the analysis to the county level, supports those findings.

In yet another research paper soon to be published in the American Economic Journal: Applied Economics, economist Arindrajit Dube shows that raising the minimum wage significantly reduces the number of families living in poverty. For example, he concludes that a $12 minimum wage in 2017 would have lifted 6.2 million people out of poverty.

While all the new research helps Democrats in Congress make their case for doubling the federal minimum wage, the CBO report will give opponents more reason to push for a smaller wage hike.

Aside from raising minimum pay, the bill would close glaring loopholes in the law that have allowed employers to pay millions of workers less than the minimum wage for decades.

The Raise the Wage Act would abolish the sub-minimum wage for tipped workers

Under federal law, businesses can pay certain workers less than the $7.25 federal minimum wage if those workers make most of their money in tips. This has traditionally included restaurant servers, bartenders, valets, and bellhops.

According to the law, businesses can pay these workers the tipped minimum wage of $2.13 an hour. If the worker doesn’t earn enough tips to make the full minimum wage, the employer has to make up the difference.

Under this system, the customer essentially subsidizes workers’ wages with gratuities. Some states require businesses to pay a higher sub-minimum wage to tipped workers than the federal one.

Seven states — Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington — eliminated the two-tier system entirely decades ago or never allowed the practice. Critics of the sub-minimum wage say too many employers don’t keep track of workers’ tips to make sure they’re at least earning the full minimum wage. Voters in the District of Columbia recently opted to abolish the separate wages floors, but city lawmakers overturned it.

The Restaurant Opportunities Center, a nonprofit labor group pushing for equal wages for restaurant workers across the United States, points out that the poverty rate among tipped workers in states with only one minimum wage is far lower than the poverty rate for tipped workers in other states. Employers pay the full minimum wage to the 1.2 million tipped workers who live in those seven states.

And these workers still earn tips. Data about tipping rates is scarce, but one analysis of tips left on credit cards shows that customers in states without a lower tipped minimum wage still leave gratuities. Alaska had one of the highest average tipping rates (17 percent); California and Oregon had among the lowest. But even the states that were ranked toward the bottom had at least a 15 percent tipping rate.

The push to eliminate the tipped minimum wage highlights how America has historically treated tipped workers differently than the rest of the US labor force.

Congress didn’t include protections for them when it passed the Fair Labor Standards Act of 1938, which established the 40-hour workweek and a federal minimum wage. The law was amended in 1966 to include tipped workers, but they were still considered a class apart from other workers.

The amendment created a sub-minimum wage for tipped workers: 50 percent of the federal minimum. Employers could count a worker’s tips toward the other 50 percent needed to make sure they earned minimum wage. This is known as a “tip credit.”

On days when workers don’t make enough tips to earn the federal minimum wage, employers must pay the difference. The sub-minimum wage marked a major change to tipping culture in America, essentially turning customer gratuities into wage subsidies.

In 1996, Congress made another significant change. It set the minimum wage for tipped workers at $2.13 an hour instead of calculating it as a percentage (half) of the federal minimum wage (at the time, the full minimum wage was $4.26). The move was viewed as a concession to the National Restaurant Association and House Republicans who didn’t want to hike the minimum wage.

Since then, Congress has raised the federal minimum wage — but not the minimum for tipped workers. That means that over the years, tips have come to make up a larger share of workers’ incomes. Some states have raised the sub-minimum wage, but 18 states have done neither.

There hasn’t been much action at the federal level. Democrats in Congress introduced a bill in 2017 that would have raised the federal minimum wage and phased out the tipped minimum wage, but it didn’t get enough support.

Earlier, in 2014, the Obama administration suggested that it was time for the federal government to do away with the two-tiered system, arguing that restaurants aren’t making sure that servers earn the full minimum wage after tips.

The system places too much trust in employers to make sure their workers are earning enough in tips to meet the federal minimum wage, according to the 2014 report from Obama’s economic advisers. When surveyed, more than one in 10 workers in predominantly tipped occupations report hourly wages below the full federal minimum wage, including tips.

The restaurant industry has fought hard to stop efforts to abolish this pay structure. The National Restaurants Association is leading this fight and was instrumental in overturning a ballot initiative voters passed in Washington, DC, to eliminate the tipped minimum wage.

The association has long resisted any type of minimum wage hike, saying they “ratchet up restaurants’ labor costs and result in thousands of jobs lost.” Unsurprisingly, the group opposes the Raise the Wage Act too.

“[The bill] could cripple restaurants leading to job losses, shift reductions and even closings,” the company stated in one of its recent ads.

That dire warning is not supported by most of the new research, but it’s a message that the US Chamber of Commerce and the conservative think tank Heritage are repeating too. Yet it was not enough to discourage moderate Democrats from voting for the act. Aside from abolishing the sub-minimum wage for tipped workers, the bill will close a loophole that let employers pay some disabled workers less than the minimum wage.

The new law would ban lower wages for workers with disabilities

The Raise the Wage Act would remove a little-known exemption in federal law that allows employers to pay some disabled workers pennies per hour.

Because lawmakers have long assumed Americans with disabilities would probably never work, Congress allowed businesses to pay them less than the minimum wage under the Fair Labor Standards Act. The law basically said a business could pay workers with disabilities as little as a few dollars — or cents — an hour to do menial tasks in a “workshop” environment with other disabled workers. The idea was that low-paid work was better than not having the option to work at all. The best-known example of this is Goodwill, though the organization is trying to move away from the traditional workshop model in some cases.

During the civil rights era, advocates began pushing back against this paternalistic, custodial attitude, which led to a series of laws mandating equal access and equal treatment for Americans with disabilities. The landmark Americans With Disabilities Act of 1990 made it illegal for the first time for employers to discriminate against workers with disabilities. While these changes made huge strides in allowing Americans with disabilities to lead normal lives, they didn’t address the 1938 federal law that allows businesses to pay less than minimum wage in some cases.

As part of the law, employers apply for a waiver from the US Department of Labor seeking permission to pay a disabled worker less than the full minimum. They must show evidence that the worker’s mental or physical disability impairs their ability to do the job. For example, if it takes the disabled worker twice as long to do a task than it does for a worker without disabilities, they could pay the disabled worker half the minimum wage.

Disability rights advocates have been critical of this practice. They want the federal government to prioritize services that focus on independence and integration over the isolation of mental institutions or segregated workshops. About 13 percent of Americans have mental or physical disabilities, and they are far less likely to work than the average American. Even so, 36 percent of Americans with disabilities had jobs in 2016 (among those who are of working age and not living in institutions), according to a recent report from the Institute on Disability at the University of New Hampshire.

Advocates have been pressuring states to ban the sub-minimum wage, but only three have so far. New Hampshire was the first state to outlaw it in 2015, followed by Maryland in 2016 and Alaska in 2018. Banning the practice at the federal level would be a major victory, essentially outlawing the sub-minimum wage everywhere.

Under the law, the Department of Labor would immediately stop issuing new waivers to employers. Those that already have them would need to gradually raise wages each year so they are paying the full $15 minimum wage by 2026.

There has been little pushback from employers who pay workers less than the minimum wage, likely because these workers make up such a small part of the workforce.

Here’s what the Raise the Wage Act doesn’t do

The Raise the Wage Act is not perfect; there are millions of low-wage workers who get a zero percent pay increase under the law. That’s because federal labor laws exempt so many workers from its protections.

It’s important to keep in mind that minimum wage laws enshrined in the Fair Labor Standard Act do not cover all workers, including those in the gig economy. Under federal law, businesses do not need to pay independent contractors and freelancers the minimum wage or overtime. Think Uber drivers and Instacart workers (they’re still arguing that they’ve been misclassified as independent contractors).

The Fair Labor Standards Act also excludes farmworkers and some domestic workers from the right to earn the minimum wage or get overtime pay. They were excluded as a concession to Southern lawmakers, whose states were highly invested in paying low wages to these groups of workers. At the time, that workforce was overwhelmingly black and Latinx, and excluding them from a minimum wage was intentional. Today, about a quarter of farmworkers and 67 percent of housekeepers earn less than the minimum wage.

All this goes to show why a $15 minimum wage is the most obvious solution to lift millions of families out of poverty. The left-leaning Economic Policy Institute estimates that the Raise the Wage Act could boost the paychecks of 40 million workers.

Now that the bill has passed the House, it will likely face stiff resistance from the GOP-controlled Senate. As Thursday’s vote showed, few Republicans want a $15 minimum wage. But it will be hard for them to persuade their working-class constituents that doubling the minimum wage is actually bad for workers.