The Minimum Wage Hike Is In Trouble. Will Conservative Dems Sink a Key Campaign Promise?

Explaining that the wage hike was overruled by the Senate Parliamentarian may not fly well in 2022.

A long-promised federal minimum wage hike to $15/hour is in jeopardy. It has been 12 years since Congress raised the minimum wage, which is stuck at $7.25 per hour. This rate renders basic housing and food unaffordable in 95% of American counties, even when working 40 hours a week according to former Labor Secretary Robert Reich. The Democrats have included a hike of the minimum wage to $15 over the next five years in Biden’s American Rescue Plan, which will pass the House but faces Senate hurdles —the minimum wage hike chief among them.

Protestors call to raise wages to a $15 minimum and allow unionization in Fort Lauderdale, Florida. Photo: Joe Raedle / Getty Images

The first obstacle is procedural. Under the Senate rules, only items that meet the “Byrd Test” for budget reconciliation can be included in the bill. This means while the bill itself cannot be filibustered, any specific provision in the bill must affect spending or revenue, and its effects cannot be merely incidental to the provision. 

Senate Budget Chair Bernie Sanders believes he has the better of this argument before the Senate Parliamentarian, who is expected to rule on the question of inclusion of the minimum wage hike today. Said Sanders, “The CBO has found that the $15 minimum wage has a much greater impact on the federal budget than opening up the Arctic National Wildlife Refuge to oil drilling and repealing the individual mandate penalties—two provisions that the Parliamentarian advised did not violate the Byrd Rule when Republicans controlled the Senate.” Based on this finding, Sanders is confident the Parliamentarian will rule his way.

Not so fast, says conservative Democrat Krysten Sinema of Arizona. Sinema, who is opposed to a $15/hour wage hike as well as to ending the Senate filibuster over legislation, provided Politico her reasoning: “What’s important is whether or not it’s directly related to short-term Covid relief. And if it’s not, then I am not going to support it in this legislation. The minimum wage provision is not appropriate for the reconciliation process. It is not a budget item. And it shouldn’t be in there.”

Without Sinema’s support (and probably also without the support of another conservative, Joe Manchin of West Virginia) the Democrats lack the numbers to overrule the Parliamentarian should the decision come out against the provision’s inclusion in the budget bill. President Joe Biden has already sought to downplay expectations by saying that he doesn’t think the minimum wage hike will make it into his American Rescue Plan, and that Congress will have to take it up under a separate bill.

The next obstacle is substantive. Sensing that the minimum wage hike will become its own hot issue, possibly around a stand-alone bill later this year, Republicans have now begun to come out with their own plans. Two have already been floated.

Senators Mitt Romney (R-UT) and Tom Cotton (R-AS) have proposed a $10/hour hike that is also tied to stricter immigration and employment rules. Their proposal would phase-in a $2.75 hike over five years, with a slower phase-in for businesses employing fewer than 20 people. It would impose civil and criminal penalties on employers that hire undocumented immigrants and that violate the paperwork requirements around their hiring. Critics have pointed out that the $10/hour proposal is below the $11/hour state minimum wage already in place in Senator Cotton’s home state of Arkansas. Democrats say the proposal falls far short of the promises they have made to American workers, so it’s unlikely to gain much bipartisan support.

Senator Josh Hawley (R-MO), who is something of a Senate pariah due to his encouragement of the recent insurrection, leans into blue-collar populism in his plan. Hawley proposes a three-year program to increase worker wages, but paid for by taxpayers instead of employers. It’s a complex system of tax credits for those earning less than $16.50 an hour, in which up to 50 percent of the difference is covered by the government. Critics on the right note the high price tag of $300 billion and see it as a kind of handout, while critics on the left note that it provides a windfall to workers in states that have kept the minimum wage lowest.

Senator Manchin has publicly stated that he favors a less ambitious national federal minimum wage of $11/hour, which he argues would be sufficient for working families in his home state of West Virginia. Because his and Senator Sinema’s support is key to the passage of any bill, that $11 figure is likely to loom large. Should the Senate Parliamentarian allow the measure into the bill, both Manchin and Sinema will actively seek to water down the $15 minimum through negotiations, so it wouldn’t be surprising if the ultimate bill came in with a compromise figure or a longer timeline than five years for the hike.

One interesting observation that comes out in polling around the minimum wage: While 83 percent of Americans favor a hike above $7.25, the perception of what actually constitutes a livable wage appears to depend in part on how much money you make. Those making over $100,000 a year are the most likely (28%) to believe $7.25 an hour is enough to live on, while those making under $50,000 a year are the least likely (12%) to agree it is enough.

For the record, U.S. Representatives and Senators now each make $174,000 per year.