Republicans Claim $15 Minimum Wage Would Hurt U.S. Jobs and Businesses

May 3, 2021 by Tom Ramstack
The House side of the U.S. Capitol. (Photo by Dan McCue)

WASHINGTON — The Biden administration’s pledge to up the wages and fair labor standards of low-income workers hit a roadblock among Republicans during a congressional hearing Monday.

The intentions are good but the economics are bad, according to critics who say the plan would backfire by driving up consumer prices and fueling unemployment.

Proposals being considered in Congress would increase the national minimum wage to $15 per hour and extend overtime pay requirements to farmworkers, domestic employees and tipped workers.

The 83-year-old Fair Labor Standards Act creates rights to a minimum wage, time-and-a-half overtime pay for more than 40 hours of work per week and prohibits “oppressive child labor.” However, it excludes farmworkers, domestic workers and tipped workers from overtime pay. 

The Domestic Workers Bill of Rights bill pending in Congress would eliminate the exception.

Guaranteed time-and-a-half pay for overtime work would help right the wrongs of the past, particularly for persons of color who do much of the agricultural and domestic work, said Rep. Alma Adams, who chairs the House Education and Labor subcommittee on workforce protections.

“Working hard is not enough if you don’t make enough,” said Adams, D-N.C.

Eliminating overtime pay exceptions and making other modifications to the Fair Labor Standards Act would protect vulnerable populations “so we can form a more equitable future,” she said.

Republicans and their witnesses during the hearing asked who pays for the higher wages if not employers who already are burdened by high expenses and tough marketplace competition, particularly among small businesses.

The current federal minimum wage is $7.25 per hour and has not been raised in more than 10 years.

One bill pending in Congress, with support from President Joe Biden, would raise the federal minimum wage to $15 per hour.

A second set of bills pending in both the House and Senate, called the Domestic Workers Bill of Rights, would guarantee domestic workers overtime pay, a day of rest every seven days, three paid days of rest each year, protection under state human rights laws and a special right to sue for sexual or racial harassment.

Rep. Fred Keller, R-Pa., called the pending bills “a radical mandated wage policy and one-size fits all” that would raise costs so high for employers, they would need to lay off many workers.

In addition, the U.S. agriculture industry would be forced to raise prices to a level that foreign competitors would take over some of their markets, he said.

Keller presented letters from industry groups that oppose the proposed changes to the Fair Labor Standards Act. They included the American Farm Bureau Federation and the National Restaurant Association.

He was joined in warning against changing the federal law by Paul DeCamp, an attorney for the law firm of Epstein Becker & Green, who represents businesses in fair wage issues.

“The economics simply cannot stand these kinds of wage levels,” DeCamp said about a $15 per hour minimum wage.

Hardest hit would be small businesses, particularly in rural areas, he said.

“If they fail, workers lose jobs,” DeCamp said.

Many tipped workers earn nearly as much money when their tips are included with wages as they would with a $15 minimum wage, he said.

However, if their base pay is raised to $15 per hour, “The current estimate is that 700,000 tipped workers would lose their jobs,” DeCamp said.

The Domestic Workers Bill of Rights was introduced in the House by Rep. Pramila Jayapal, D-Wash., who said the bill would make up for the inequities in the Fair Labor Standards Act.

“We’re here today to take responsibility for the legacy of the Fair Labor Standards Act,” she said.

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