$15 US Minimum Wage Bill Could Be Helped Along With Sweeteners
Workers in some parts of New York have already started earning the state’s new $15 hourly minimum wage, while those in lower-cost regions of the Empire State will see their raises phased in later, to make the change more palatable to businesses.
In New Jersey, Gov. Phil Murphy (D) is expected to sign legislation that would gradually increase the state’s hourly minimum wage to $15 over the next five years. The measure provides a longer phase-in period for small businesses and tax credits for employers that hire people with disabilities.
The two states’ approaches reflect a growing list of compromises and carveout provisions that lawmakers have approved to pass minimum wage raises, partly in response to the Fight for $15 campaign. Federal lawmakers might follow their lead as they try to update a decade-old $7.25 hourly rate, political observers and lobbyists told Bloomberg Law.
And it’s not really a totally new concept for the federal government. “They can even look at previous federal legislation,” said Yana Rodgers, an economist and faculty director of the Rutgers Center for Women and Work. “When they established the Fair Labor Standards Act of 1938 to grant minimum wage and overtime pay, they made exclusions for domestic service and farm workers. Even in 1938 there were exclusions for political reasons.”
The House is likely to pass legislation (H.R. 582, S.150) to boost the federal minimum wage to $15 in a series of steps. But supporters are likely going to have to add some sweeteners for the business community to have any chance at getting the Republican support needed to move in the Senate.
Compromise Could Be Tough
The Democratic legislation would gradually raise the federal wage floor to $15 by 2024. It would also remove long-standing sub-minimum wage mandates for disabled workers and gradually increase the tipped minimum wage from $2.13 to $15.
Democrats see recent ballot initiatives to gradually raise the pay floor in red states like Missouri and Arkansas as a sign that there’s widespread public support for a wage increase.
The bill, expected to pass the House in a party-line vote, promises little-to-no traction in the Senate, where some key Republicans are vowing to reject the legislation. The other hurdle could be convincing President Donald Trump’s economic adviser, Larry Kudlow,who opposes a federal minimum wage.
“All Republicans—President Trump, Senate, and House—should know that there is no plausible ‘compromise’ that would offset as many as two million jobs lost from a $15 federal minimum wage,” Michael Saltsman, managing director for the Employment Policies Institute in Washington, told Bloomberg Law in an email. “The GOP has no reason to negotiate with itself to help Nancy Pelosi achieve one of her top priorities.”
$15 a ‘Non-Starter’
Even Republicans and business advocates that may support some increase in the pay floor aren’t likely to go for $15 an hour.
The $15 rate is a “non-starter,” but “could the Senate consider a package with a lower amount and a longer time to implement and other sweeteners? that is not a non-starter,” said Randy Johnson, who heads government affairs at management firm Seyfarth Shaw.
There’s no ruling out any compromises for $15 advocates like the National Employment Law Project.
“All I can say is that I do hope that the Senate Republicans will come to the table to discuss how and how high we can raise the minimum wage and to eliminate the unfair subminimum wages that are allowed for tipped workers, disabled workers and youth workers,” Judy Conti, the group’s government affairs director told Bloomberg Law in an email. “We welcome serious conversations in good faith.”
The last increase, to a $7.25 hourly rate in July 2009, was attained by Democrats as a provision attached to a must-pass Iraq war spending bill. Before then, the federal minimum wage had held at $5.15 for about a decade.
Education and Labor Committee Chairman Rep. Bobby Scott (D-Va.) says the legislation’s proposed $15 figure will “probably not” be changed in the House.
“It’s interesting that the Arkansas and Missouri increases didn’t get to $15, but they were phased in with that phase in almost equivalent to the phase-in we have in our bill,” Scott told Bloomberg Law Jan. 30.
Arkansas, for example, increased its minimum wage to $9.25 Jan. 1, to tick up to $11 by 2021.
Concessions Weren’t Enough in Past
Past ideas about increasing the federal minimum wage have included carveouts for some industries as well as tax incentives. A major aim of such provisions is to soften the impact on small businesses, which are some of the most vocal opponents of rate hikes.
“The most opposition would be coming from small business owners and anyone representing that group,” Rodgers said, adding that “pork for small businesses like business loans or tax incentives” might help ease the pain of an increase.
Federal lawmakers have plenty of states to look at for inspiration besides New York and New Jersey. Twenty-nine states and Washington, D.C., have minimum wages higher than the federal $7.25. The debate will continue as states like Maryland and Pennsylvania also consider a $15 wage law.
Management advocates caution about comparing state and federal actions, especially in blue states where Democrats were essentially negotiating with fellow Democrats.
“The states have their own individual issues, which I don’t think could be reflected at the federal level,” except maybe through regional adjustments based on cost of living, Johnson said. “BLS could do that,” he said.
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