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Push for Minimum Wage Hike Persists

March 3, 2021 by Reece Nations
Push for Minimum Wage Hike Persists
Activists appeal for a $15 minimum wage near the Capitol in Washington, Thursday, Feb. 25, 2021. The $1.9 trillion COVID-19 relief bill being prepped in Congress includes a provision that over five years would hike the federal minimum wage to $15 an hour. (AP Photo/J. Scott Applewhite)

WASHINGTON — Senate Parliamentarian Elizabeth MacDonough quashed Democrats’ plans to add a $15 per hour federal minimum wage increase to President Biden’s $1.9 trillion COVID relief package, but some members are not giving up.

Democrats are planning to pass the bill by using the reconciliation process tied to the federal budget, meaning they can pass the stimulus package with a simple 51-vote majority rather than the 60-vote threshold most bills need to move forward. Some are still calling for the wage hike to be included in the legislation. 

A group of 23 progressive Democrats in the House of Representatives signed a letter to Biden and Vice President Kamala Harris on Monday urging them to overrule MacDonough and maintain the wage increase within the American Rescue Plan Act. Because the parliamentarian of the Senate is merely the arbiter of the chamber’s rules, the decision could be overruled if 60 Senators agree to do so. 

“For four years, progressives have been negotiating in good faith, putting our bold agenda at the center of the American consciousness in the hopes that our country does indeed share our commitment to building a better future,” Progressive Caucus Deputy Whip Rep. Ro Khanna, D-Calif., said in a written statement. “This ruling is a bridge too far. We’ve been asked, politely but firmly, to compromise on nearly all of our principles (and) goals.” 

“Not this time,” Khanna continued. “If we don’t overrule the Senate parliamentarian, we are condoning poverty wages for millions of Americans. That’s why I’m leading my colleagues in urging the Biden administration (sic) to lean on the clear precedent and overrule this misguided decision. Give America a raise.” 

The decision to remove the wage hike from the COVID relief bill comes during a time in which polling data suggests the policy is widely popular among Americans. An online poll conducted by Reuters/Ipsos from Feb. 18 through Feb. 24 found that roughly 59% of respondents supported the idea of raising the federal minimum wage from $7.25 per hour to $15 per hour, while 34% opposed the idea. 

Following MacDonough’s ruling, progressives scrambled to find an alternate path for the wage increase. A tax plan from Senate Finance Committee Chairman Ron Wyden D-Ore., and Senate Budget Committee Chairman Bernie Sanders, I-Vt., that would impose a 5% payroll tax penalty on large businesses that pay wages under $15 per hour was ultimately abandoned. 

Consequently, Sanders announced on Monday that he plans to introduce an amendment to the stimulus bill that would reestablish the wage hike when the Senate votes on the bill later this week. Democrats still aim to send the COVID relief bill to Biden by the end of next week. 

“My own personal view is that the Senate should ignore the parliamentarian’s advice, which is wrong in a number of respects,” Sanders said in a written statement. “I am not sure, however, that my view at this point is the majority view in the Democratic caucus.” 

Republicans widely cite a February Congressional Budget Office report in opposition to the policy, which indicates the wage hike could reduce employment by around 1.4 million workers. However, the CBO report also states the cumulative pay increase of $509 million would offset the $175 million in lost wages from reduced employment and diminish the number of people in poverty nationwide by 900,000. 

Although the total nominal income would be “roughly unchanged” by the policy, labor income would increase while capital income would decrease, according to the CBO’s estimates. Now, Sanders is tasked with convincing moderate Democrats in the Senate to support his amendment to the bill. 

“The CBO has demonstrated that increasing the minimum wage would have a direct and substantial impact on the federal budget,” Sanders said in a written statement. “What that means is that we can clearly raise the minimum wage to $15 an hour under the rules of reconciliation.” 

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