LMU already employs a $15 minimum wage, but soon, the rest of the country may as well. As Democrats in Congress strive to pass President Joe Biden’s stimulus plan to provide relief to Americans amidst the COVID-19 pandemic, one area of contention is whether the federal minimum wage ought to be incrementally increased as part of stimulus legislation. Since 2009, the minimum wage at the federal level has remained stagnant at $7.25, despite inflation and growing economic inequality.
House Democrats passed a bill increasing the minimum wage to $15 in 2019, but the legislation was stalled in a Republican-controlled Senate. Now that Democrats have a majority in both chambers of Congress with Vice President Kamala Harris serving as a tie-breaker vote in the Senate, a $15 minimum wage may be possible for the first time.
Democrats have sought to increase the minimum wage over the past couple years, with support from over 60% of Americans, but it has become a priority for them as economic inequality has worsened over the course of the COVID-19 pandemic. As junior management and leadership major Amanda Godfrey put it, “I feel like it’s harsh to keep convincing yourself that a wage under $15 can sustain an individual and their family. It’s especially difficult during the pandemic where people are trying to maintain their housing and living expenses with this bare minimum.”
The COVID-19 pandemic has also disproportionately impacted marginalized communities and furthered economic and racial inequality, as Black and Latino workers are more likely to have frontline jobs with lower wages, putting them at higher risk of contracting COVID-19 while working full-time to meet their needs. The Economic Policy Institute found that even an increase of the minimum wage to $12 last year would have resulted in 6.2 million fewer individuals living in poverty — the same employees who have been essential workers throughout the pandemic. This would be a step in closing the economic divide and preventing a “K-shaped” recovery from the pandemic, where the wealth of the working class remains stagnant or decreases while the wealth of the white-collar class increases.
Opponents to the $15 minimum wage suggest that increasing the minimum wage will result in job losses as companies lay off employees in response. The the Congressional Budget Office also reported that the Raise the Wage Act of 2021 would result in a 0.9% reduction in employment. That’s why Republican senators Tom Cotton and Mitt Romney have recently countered the Democrats’ proposal by introducing a bill that would increase the minimum wage to only $10, to avoid the adverse effect on unemployment, but only if businesses use the E-Verify system to confirm that they only employ documented citizens, alienating undocumented migrant workers.
In contrast, the Economic Policy Institute found that the impact of an increased minimum wage on unemployment is "essentially zero" and that the Congressional Budget Office inflated its supposed impact. Rodrigo Mendes-Maximo, a senior screenwriting major and a board member of LMU’s Democratic Socialists of America chapter, said, “Given the extensive evidence demonstrating that minimum wage hikes do not negatively impact employment rates, giving workers this long-needed wage adjustment is an unequivocal moral imperative.”
Progressives have also pointed out that wages haven’t kept up with inflation and cost of living over the past decades, and that even $15 is no longer a living wage. According to The Center for Economic and Policy Research, the minimum wage would have to be over $24 today just to keep up with the increase in productivity and inflation since 1968.
Tessa Muller, a junior political science major, believes that the minimum wage should be set regionally. “Generally, I think the minimum wage should be set at the local level, as the cost of living varies widely across the country,” said Muller, who also shares the concern over lost jobs as a consequence. "It should be a number that is as high as possible without causing an increase in unemployment, and then future increases should be pegged to inflation."
Since passing legislation in the Senate traditionally requires 60 votes, Senate Budget Committee Chairman Bernie Sanders aimed to pass the bill through a process known as budget reconciliation. This process basically allows the Senate to pass legislation affecting the federal budget to address issues of the moment quickly with a simple majority of 51 votes. On Thursday evening, Senate Parliamentarian Elizabeth MacDonough ruled that the minimum wage increase is "merely incidental" and therefore could not be passed through the budget reconciliation process.
Vice President Harris, in her constitutional role as President of the Senate, can overrule that decision, but White House Chief of Staff Ron Klain signaled on Wednesday that the administration wouldn't try to overrule the parliamentarian's decision. Even if she did, Democrats must win over their most conservative member, Senator Joe Manchin, who opposes the legislation, which would result in low-wage workers in his home state of West Virginia would seeing a $4,000 increase in their yearly income.