Topline
The House Education and Labor Committee voted early Wednesday to advance a portion of President Biden’s $1.9 trillion American Rescue Act that includes a $15 per hour national minimum wage, but the massive wage hike is far from guaranteed.
Demonstrators participate in a protest outside of McDonald’s corporate headquarters on January 15, … [+]
Key Facts
The provision is a major priority for Biden and progressives and would gradually increase the national minimum wage from $7.25 per hour to $15 per hour over the course of five years.
In a new analysis released this week, the Congressional Budget Office estimated that the plan would lift 900,000 workers out of poverty but cost 1.4 million jobs and add $54 billion to the cumulative federal budget deficit.
Republicans on the committee objected to the measure because of those losses in employment and rising deficit costs.
Democrats are using a special process called budget reconciliation that will allow them to pass Biden’s stimulus plan with a simple majority (and over Republican objections), but that plan comes with a major restriction: every provision must be related in some way to the federal budget.
Sen. Bernie Sanders (I-Vt.), head of the Senate Budget Committee, has argued that the CBO’s analysis shows that wage hike would impact the budget and is therefore eligible under the reconciliation process, but no final determination has been made.
Senate Majority Leader Chuck Schumer (D-N.Y.) said Tuesday that Democrats are consulting with the Senate parliamentarian to determine whether the wage hike could be included in the final legislation.
Big Number
27 million. That’s how many workers would be impacted by the wage hike, according to the committee.
Chief Critic
“Why in the world would we vote to reduce employment when so many people are struggling in the pandemic and desperate to get back to work?,” Rep. Virginia Foxx (R-N.C.) said, according to Bloomberg.
Tangent
Because of their razor thin majority in the Senate (50 Democrats plus Vice President Kamala Harris’ tie-breaking vote), Democrats cannot afford to lose a single vote on the sweeping $1.9 trillion plan. That means the final legislation will also have to be acceptable to more conservative members of the caucus like Sen. Joe Manchin (D-W.Va.), who has been a vocal opponent of a $15 minimum wage.
Further Reading
Democrats’ Stimulus Priorities Would Boost Income By 33% For Poorest Americans (Forbes)
Democrats Propose Sending $3,000 Per Child To Millions Of American Families (Forbes)
Stimulus Check Debate Wears On As House Committees Begin Work On Biden’s $1.9 Trillion Plan—Here’s What To Expect (Forbes)
Goldman Sachs: $15 Minimum Wage Is Unlikely Even Though It Would Benefit 30% Of American Workers (Forbes)
