Everything you need to know about the minimum wage debate
The last time the federal minimum wage increased was back in 2009, when it rose to $7.25 per hour. Prior to the three-step increase passed by Congress in 2007, the amount had sat at $5.15 per hour for a decade despite falling behind inflation and productivity.
Activists have waged a nearly decade-long campaign for an increase to $15 per hour, and President Biden has said he wants to enact that raise into law. “There should be a national minimum wage of $15 an hour,” he said last month. “Nobody working 40 hours a week should be living below the poverty line.”
Raising the minimum wage is supported by a majority of Americans, with a new Yahoo News/YouGov poll finding 52 percent in favor of raising it to $15 per hour, versus 37 percent in opposition. Recent polling elsewhere has found support for $15 per hour in the low 60s, with a Yahoo Finance/Harris survey earlier this month finding that 83 percent of Americans agreed the current $7.25 per hour wasn’t high enough.
Minimum wage increases have also found success at the ballot box, even in states won by former President Donald Trump. In 2018, 68 percent of Arkansas voters opted to raise the minimum wage there to $11 per hour by 2021. That same year, 62 percent of Missouri voters approved an initiative to raise the rate to $12 per hour by 2023. And even as Democrats struggled in Florida in November, 60 percent of voters there supported an initiative that would incrementally raise the state minimum wage to $15 per hour by 2026.
Here’s what Biden has proposed and what Republicans have countered with when it comes to legislation raising the minimum wage.
Biden proposal
As part of its $1.9 trillion American Rescue Plan, the Biden administration included a provision to increase the minimum wage to $15 per hour over the course of five years.
The wage hike has two key supporters in Senate Majority Leader Chuck Schumer and Senate Budget Committee Chairman Bernie Sanders, but that may not be enough to be able to include it in the bill congressional Democrats hope to send to Biden to sign by mid-March.
First, the Senate parliamentarian would have to allow the minimum wage increase to be included in a process called reconciliation, which would allow Democrats to pass the legislation with just 50 votes. If that was allowed, the Democrats would then need to get all 50 members of their caucus on board, with the tiebreaking vote then set to be cast by Vice President Kamala Harris.
That would likely be an issue, as Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona have expressed their opposition to the increase. It’s unlikely a Republican senator would cross over to give Democrats their 50th vote, meaning the final package has to appease the party’s most moderate senators, even if that falls short of the package proposed by Biden and approved by Democrats in the House.
This week Manchin said, “$11 is the right place to be,” seeking a lower number. “Throwing $15 out there right now just makes it very difficult in rural America.”
Biden has opened the door to lowering the target rate, saying at a CNN town hall last week that though he supports $15, “that’s a debatable issue.”
“Let’s say you said you’re going to increase the minimum wage from $7.25 an hour between now and the year 2025 to $12 an hour, to $13 an hour — you’d double someone’s pay and the impact on business would be absolutely de minimis, and it would grow the GDP,” Biden said, adding that “it’s totally legitimate for small business owners to be concerned about how that changes.”
Biden had conceded in an interview with CBS News earlier this month that he didn’t think the minimum wage increase would survive in the COVID-19 relief package.
In addition to attempting to include the minimum wage increase in COVID relief legislation, Democrats have reintroduced the Raise the Wage Act, a separate bill that would reach the $15 target by 2025. The House passed the bill in July 2019, but it died in the Republican-controlled Senate.
“Even before the COVID-19 pandemic, the $7.25 federal minimum wage was economically and morally indefensible,” said Rep. Bobby Scott, D-Va., in a statement with the reintroduction of the bill. “Now the pandemic is highlighting the gross imbalance between the productivity of our nation’s workers and the wages they are paid.”
A report from the Congressional Budget Office found that the $15 increase in that time frame would pull 900,000 people out of poverty but cost 1.4 million jobs. The White House has pushed back on those findings, with Biden adviser Cedric Richmond telling NPR this week, “Look, we saw the budget office estimates. We don't think that's true. We've looked at states who have raised the minimum wage in the past, and those states actually had job growth.”
“President Biden has been consistent in private and public about his commitment to raise the minimum wage to $15 an hour, which is why he included it in his first major piece of legislation,” White House spokesperson Mike Gwin said. “That commitment will remain unshaken.”
Republican counters
GOP Sens. Mitt Romney of Utah and Tom Cotton of Arkansas announced their own minimum wage proposal on Tuesday, tying an increase to $10 per hour by 2025 to an expansion of the E-Verify program, which would make it more difficult for businesses to hire undocumented immigrants.
"Our legislation would raise the floor for workers without costing jobs," Romney said. "We must create opportunities for American workers and protect their jobs while also eliminating one of the key drivers of illegal immigration.”
Critics of the proposal have noted that Arkansas, which Cotton represents, has already implemented an $11-per-hour rate despite having one of the lowest per capita GDPs of any state. When asked about this Tuesday, Cotton noted that it’s still $7.25 in many states.
"We're trying to reach the broadest coalition of senators of both parties as possible,” he said. “Ten dollars seems like a reasonable wage in many states with lower labor costs."
Leading progressives have blasted the proposal.
“When members of Congress fight to set the minimum wage below a living wage, they are playing a role in creating and preserving poverty in the United States,” tweeted Rep. Alexandria Ocasio-Cortez, D-N.Y. “The $15/hr proposal with multi-year phase in is already a deep compromise. $10 an hour is legislated poverty.”
On Wednesday, Sen. Josh Hawley, R-Mo., released his own proposal, calling for a refundable tax credit to Americans making $16.50 or less per hour. The program would be open to those with Social Security numbers only, meaning non-U.S. citizens and undocumented immigrants would not be eligible.
"The bill is targeting folks who are making $34,000 to $35,000 a year and less," Hawley told Axios. "This is targeted toward people who have been the hardest hit, who are trying to get back on their feet."
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