CHN: Minimum Wage Increase Stalls in the Senate
On April 30, Senate Republicans refused to allow a debate on increasing the federal minimum wage by blocking consideration of the Minimum Wage Fairness Act (S. 2223) by a vote of 54-42 (60 votes were required). Senator Bob Corker (R-TN) was the only Republican to join Democrats and Independents in support of the procedural vote. Senator Harry Reid (D-NV) changed his ‘yes’ vote to ‘no’ so that he could bring the bill up again. Failure to pass the $10.10 an hour increase means less income for the nearly 28 million workers and their families who would receive a bigger pay check.
Those working full-time at the current $7.25 an hour minimum wage (40 hours a week for 52 weeks) earn $15,080 a year, over $4,000 below the poverty line for a family of three. Increasing the wage to $10.10 would put those families above the poverty line. S. 2223 would increase the minimum wage in three increments of 95 cents each over two and a half years from the date of passage. Thereafter, the wage would rise with the cost of living. The unconscionably low $2.13 wage for the 6 million tipped workers, half of them in the restaurant industry, has not been increased since 1991. Under S. 2223, it would be increased to $3.00 six months after enactment and then annually adjusted until it equals 70 percent of the minimum wage. Small businesses would benefit from the legislation, which extends the tax deduction for up to $500,000 of business expenses including computer software and rental property through 2016.
Whenever Congress debates an increase in the minimum wage, opponents bring out the old argument that it would hurt small businesses. This time they also use a Congressional Budget Office report that says 500,000 jobs could be lost if the wage is increased to $10.10. However, the CBO analysis derives its job loss numbers by taking an average of studies, including older ones that have been discredited. Most recent studies by a range of economists show that there has been virtually no job loss after the last two wage increases in 1996 and 2007. Further, the CBO analysis does not take into account the impacts the increase in wages would have on increased worker productivity and reduced turnover resulting in lower hiring costs.
According to a National Employment Law Project report, during the Great Recession, 22 percent of the jobs lost were low-wage jobs, while 44 percent of the new jobs created during the recovery are low-paying. The report finds that today there are nearly two million fewer jobs in mid- and higher-wage industries than there were before the recession took hold, while there are 1.85 million more jobs in lower-wage industries. That means raising the minimum wage is even more critically important, because more and more workers are in low-wage industries.
Senator Susan Collins (R-ME) has been working to garner support for a lesser increase in the minimum wage using the argument that an increase to $10.10 would hurt small businesses. However, the Maine Small Business Coalition representing more than 3,600 small business ownersin Maine is urging its members to sign the nation-wide small business leaders’ petition in support of increasing the minimum wage to $10.10. The petition reads in part, “Minimum wage increases boost sales at local businesses as workers buy needed goods and services they could not afford before. … A fair minimum wage makes good sense for our businesses, our workforce, our communities and our nation.”
Lead sponsors of the House and Senate bills, Senator Tom Harkin (D-IA), and Representative George Miller (D-CA), are adamant that while there may be room to compromise in terms of other business-related provisions that might be added to their bills, they are unwilling to waver on the $10.10 increase, stating that no poverty wage should be passed into law.
It is the intention of the Senate leadership to keep trying to pass the minimum wage increase. After the April 30 vote, Senator Harkin stated, “This is not the only time you will see the Senate vote on the minimum wage bill this year.” It will be still more difficult to pass the bill in the House, but pressure to act will increase if the Senate is able to pass the bill.
Momentum to increase the federal minimum wage is strengthening as more states pass higher minimum wages. On May 5, Maryland became the latest state to approve a $10.10 minimum wage, increasing in increments to the new rate by July 2018. Twenty-six states and the District of Columbia will have minimum wage rates above the federal level by next year. DC’s will be $10.50 next year and California’s will be $10. Many cities and counties also have adopted higher minimum wages.
The case for increasing the minimum wage was further strengthened when three 2012 Republican Presidential candidates, Mitt Romney, Tim Pawlenty and Rick Santorum, recently expressed support for increasing the wage. “I part company with many of the conservatives in my party on the issue of the minimum wage. I think we ought to raise it,” nominee Romney said on MSNBC’s Friday, May 9 Morning Joe. In another television interview Pawlenty said, “For all the Republicans who come on and talk about, ‘we’re for the blue-collar worker, we’re for the working person,’ there are some basic things that we should be for. One of them is reasonable increase from time to time in the minimum wage.” Santorum later agreed.