Biden Moves to Raise Minimum Wage as Part of Economic Stimulus Bill
Way back in 1933, President Franklin Delano Roosevelt said, “It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country." Roosevelt’s words remain alive and well today as a new battle begins over President Biden’s proposal to raise the minimum wage to $15 per hour.
In a White House meeting last week, Biden echoed Roosevelt’s words. “No one in America should work 40 hours a week, making below the poverty line. Fifteen dollars gets people above the poverty line,” he said while discussing the stimulus package that contains the wage hike. But, as members of Congress begin to review the new stimulus plan, the battle lines are already being drawn.
Democrats, Republicans, and factions of each party are stating their positions, and there is little agreement. Raising the federal minimum wage from the current $7.25 per hour, a rate that has been in effect since 2009, could be the first hot spot in what is sure to become a heated and heartfelt economic negotiation. Many argue that the devasting effects of COVID-19 make it even more critical to immediately assist American workers in meaningful ways.
This is the longest period in the history of the minimum wage without an increase. Biden’s legislation is designed to raise 28 million full-time employees out of poverty by 2024, the date by which the full wage hike will go into effect.
The strategy for gaining approval will depend on what path Congressional leaders decide to take to move the bill forward. One track is “reconciliation,” a Senate procedure that allows legislation to pass without being subject to a probable filibuster. Reconciliation also limits debate to 20 hours and prohibits debate on any subsequent amendments.
Republicans may argue that a minimum wage hike does not fall under rules limiting reconciliation to matters related to spending, taxes and the federal budget. Arguably, what private employers pay their workers is outside this limitation. Democrats, including the new Senate Budget Committee chair Bernie Sanders (D-Vt), told reporters that the minimum wage hike is “absolutely consistent with the rules of reconciliation.” They argue it will reduce the federal budget because billions would be saved from government programs that aid the working poor.
Even if reconciliation is pursued, the minimum wage hike might not receive the required number of votes. Even if every Democratic Senator casts a vote for the bill, 50 votes plus that of Vice President Harris are needed for passage. As of the beginning of February, only 38 Senators have signed on as co-sponsors, according to the Washington Post. While they all agree that the bottom must be raised, there is disagreement over how high. While many moderate Democrats agree with the $15 per hour proposal, more progressive members advocate for $20.
On the other side of the aisle, Republicans are split as well. Some support the legislation but are urging that the hike be lower than $15. Others want to delay a vote and take it up again as a different bill. They urge that it be separated from the COVID-19 legislation and dealt with after the rest of the stimulus is resolved. And some of the more conservative members have said that any increase could lead to additional job losses at a time when the pandemic has already removed 10 million jobs.
Meanwhile, both Biden and the states have taken their own actions to raise the minimum wage. Last week, the President signed an executive order that will start the process of requiring federal contractors to pay workers at least $15 per hour. In addition, many states and cities have enacted legislation of their own.
Most recently, Florida approved an amendment to its state constitution to raise the state’s minimum wage from $8.56 to $15 per hour. Some states have tied their minimum wages to the consumer price index to avoid diminishing the purchasing power of their set wages. In 2018, 29 states had laws that exceeded the federal government’s $7.25, an amount that is worth about 17 percent less than it was when that number went into effect in 2009.
Minimum wage legislation grew out of the sweatshop tragedies of the early 20th century. Massachusetts passed the first law in 1910, followed by 15 states and the District of Columbia. Several laws that sought wage minimums plus workplace protections, especially for women, were declared unconstitutional by the U.S. Supreme Court. Roosevelt’s New Deal attempted to set minimum wages and maximum hours, but these, too, were struck down by the high court. Finally, in 1938, the minimum wage was re-established under the Fair Labor Standards Act, with a uniform rate of 25 cents per hour going into effect. This amount only governed wages for employees engaged in interstate commerce, but it was a start.
Since 2009, the date of the last minimum wage hike, workers, including those in the fast-food business, have led protests that demanded a raise. In 2014, the Senate debated the Obama-supported hike to $10.10 per hour over a two-year period. It failed, but more and more states and localities preempted federal law and set their own higher wage requirements. In 2017, Senator Sanders and 28 fellow Democrats introduced the “Raise the Wage Act.” It sought a new base of $9.25 per hour, with gradual increases to $15 by 2024. It was defeated as well.
It is unclear what the future of the $15 per hour minimum wage will be or how it will get there. In the next few weeks, it could become a separate bill and a separate battle. Or it could remain part of the economic stimulus bill, which might proceed under reconciliation or as a vote under party lines. It could be raised or lowered. Or, it could flounder like so many of its predecessors.
