Terry H. Schwadron
Feb. 28, 2021
OK, the Senate procedures won’t allow consideration of the first minimum wage increase in 14 years in the coronavirus aid bill as a part of the arcane rules of “budget reconciliation,” based on the Senate’s nonpartisan parliamentarian’s study of what’s kosher. And the House approved the big aid bill early yesterday with the minimum wage hike included anyway.
But there’s nothing stopping this Senate from voting straight up and down on the question — other than the fear that the bill won’t pass, whether it calls for $15 an hour or $11 an hour or implementation over a number of years.
That measure would require 60 Senate votes, improbable at best in this split Senate, though a countermeasure to tax bigger companies failing to pay prevailing wages also was being considered to keep it in the aid bill. There always is the chance that Democrats will attack the minimum wage to another bill, like one for defense spending.
Actually, if a majority of senators, led by Republicans plus — and maybe Sen. Joe Manchin III, D-WVa, and Kyrsten Sinema, D-Ariz. — are going to insist that working Americans should work fulltime and more only to remain in poverty, maybe we should just force them all to vote, get them on the record by name and vote them out of office.
Democrats should move away from expecting a sure thing, and demand a public showing of hands.
Republicans, with few exceptions, say it’s the wrong time to raise wages, because small business has been hit hard and should not face yet more burdens in re-opening. It was the wrong time in 2019 too, and every other time the subject arises. It’s always the wrong time. Apparently, it is never the wrong time for workers to be underpaid, to work two jobs and still be under the poverty line.
The same bloc would tell you it’s never the wrong time to give corporate tax breaks or to cut eligibility for food stamps, child-care subsidies or health care.
There is, of course, no minimum price standard, only one for wages: The outmoded, inflation-reduced income figures senators use ignores the constant increase in prices. As such, it is a poor measure of effective income.
And, despite cutting the minimum wage question, these same Republicans still think is the wrong time to pass a coronavirus aid bill that they see as too expensive, regardless of what it pays for.
Senate Republicans always say they want more jobs, strong economic growth, more small and big business — just not fair pay.
Picking Your Own Data
Our current political debate over raising the minimum wage debate fits perfectly as one of those issues in which senators are cherry-picking information to reinforces what they already believe.
So, armed with a Congressional Budget Office report that projected 1.4 million possible job “losses” over the next four years with a federal minimum wage increase to $15 an hour, Republicans argue this is a bad result — and a bad time. Of course, “loss” here means small businesses possibly forgoing some hiring. That estimate is slightly higher than the same question posed and punted in 2019 — when there was no pandemic to hide behind.
There is no assessment for increased jobs being created in energy, health, transportation, construction or a variety of other areas also targeted for investment by the same administration — all of which dwarf these predictions. And it hasn’t proved fully true in various cities where wages have been increased.
Actually, Manchin and Sinema mostly seemed to care whether any minimum wage issue is reflected in the large coronavirus and economic package being pushed by the Joe Biden White House. Magically, Manchin thinks a gradual increase to $11 an hour, a number he pulled out of a hat as a midpoint in the debate, would fare better politically in a separate bill. The best Republican proposal, by one senator, is for $10 raise over several years; another wants $15 but only for employees of companies making more than $1 billion a year.
Democrats can stand on the same projections to say the raise, first in 14 years, will definitely lift 900,000 people out of poverty and setting us up as a country for more people to pump more consumer spending and taxes. Among other things, there are any number of advocates who cite the benefits from the raise and say businesses will be able to handle the costs.
The same Congressional Budget Office projects that the economy is going to rush back as soon as we get through vaccination programs for the pandemic. It is the perfect time to assure that we share the benefits of that growth with workers.
It’s a Pattern
You can see this pattern of cherry-picking all the way through the income wars. Comparing reports of year over year income depends a lot on how you sift the data; concluding that jobs are growing substantially over a year decimated by pandemic isn’t terribly useful, for example. Measuring the effect of wage scales for a single business to compare with national growth rates necessarily leads to statistical confusion.
Lawmakers are looking to data, but they only use the part that advances their political argument.
They don’t want to frame the question as one of fairness in a time of deepening income inequalities.
More than 20 states and many cities have minimum wages above the federal wages and are moving ahead on raising the minimums to fill a national void. In cases where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages.
The New York Times has shown that competing economic research has found recent minimum-wage increases that have not had caused huge job losses. In a 2019 study, researchers at the Federal Reserve Bank of New York found that wages had increased sharply for leisure and hospitality workers in New York counties bordering Pennsylvania, which had a lower minimum, while employment growth continued. In many cases, higher minimum wages are rolled out over several years to give businesses time to adapt.
How We Got Here
The federal minimum wage for covered nonexempt employees is $7.25 per hour has not changed since 2009.
Minimum wage coverage is not universal. Some employers, particularly restaurants and those with tipped employees or those who work as independent contractors — trends thare growing — are not covered. Among the states, Alabama has no minimum wage.
The federal minimum wage was established in 1938, as part of the Fair Labor Standards Act (FLSA), to help ensure that all work would be fairly rewarded and that regular employment would provide a decent quality of life. In theory, Congress is supposed to make periodic adjustments to the federal minimum wage so that even the lowest-paid jobs in the economy still pay enough for workers to meet their needs. Yet since the late 1960s, lawmakers have let the value of the minimum wage erode, according to the Economic Policy Institute.
Throw in inflation, and the delays have actually reduced low-income wages over time.
California, Florida, Illinois, Massachusetts and others have approved gradual, annual minimum wage increases to reach $15 per hour within several years. As of January, wages in 27 areas rose legally by small amounts towards $15. The current proposal would affect pay for 27 million or more..
Obviously, someone has to pay for minimum wage mandates. Employers must make difficult decisions and tradeoffs. If wages rise, benefits or time off may be reduced. Some younger and less experienced workers never get hired at all, and the differences may be felt differently in rural areas or small towns than in the cities.
Of course, if we could count on employers to pay living wages, we wouldn’t need wage minimums at all.