Democrats Propose Phasing in $15 Minimum Wage Over Five Years

House and Senate Democrats on Tuesday unveiled a bill to increase the federal minimum wage to $15 an hour, highlighting their intention to include the measure in the next round of Covid-19 relief.

The Raise the Wage Act of 2021 follows through on one of President Joe Biden’s priorities for the aid package, and mirrors a bill that passed in the House in 2019. It would phase in the hike from the current $7.25 to $9.50 this year and the full $15 by 2025.

House Budget Committee Chairman John Yarmuth said Democrats are prepared to try to enact the increase through a special budget tool that can bypass any filibuster by Senate Republicans. Even so, experts are divided on whether the minimum wage can pass using those budget-reconciliation rules -- which require a provision to have more than “merely incidental” fiscal impact. Supporters of the bill argue that it will increase tax revenue and decrease government spending on food stamps and other support for the poor.

The proposed bill would also raise the tipped minimum wage and youth minimum wage, by phasing both out by 2027. After 2025, the minimum hourly rate would be indexed to national median wage growth, using Labor Department calculations. House Education and Labor Chair Bobby Scott said that the bill will raise wages for 32 million workers.

Forgoing Republicans

“My hope is that we will bring Republicans on board,” said incoming Senate Budget Committee Chair Bernie Sanders. “If we cannot get enough Republicans to vote for this legislation under regular order we must not take no for an answer.”

Sanders told reporters Tuesday he will put the measure in a budget reconciliation bill if Republicans oppose it.

The introduction of the measure comes as Democrats prepare to move forward on Biden’s $1.9 trillion Covid-19 relief bill without Republican support.

Senate Majority Leader Chuck Schumer said on the Senate floor Tuesday that he still wants to strike a bipartisan deal, but action is urgently needed and he will not allow Republicans to delay it.

Bipartisan Group

“The work must move forward, preferably with our Republican colleagues, but without them if we must,” Schumer said. He later told reporters that senators should be prepared to vote as soon as next week on a budget resolution that would set up a pandemic-relief package.

Moderate Senate Republicans, whose votes would be needed to reach the 60-vote threshold to pass legislation outside of the reconciliation process, have already said they do not support the minimum wage boost as part of the Covid-19 relief bill.

Republican Senator Mitt Romney of Utah said that boosting the minimum wage to $15 would “be very devastating to many, many small businesses,” in remarks circulated by his spokesperson. Romney highlighted that the Congressional Budget Office calculated it would cost more than 1 million jobs.

Business Concerns

Glenn Spencer, senior vice president of the employment policy division at the U.S. Chamber of Commerce, said a minimum wage increase is worth considering, but should be tied to reforms to the Fair Labor Standards Act.

The $15 an hour target is a political number, not one “grounded in economics,” Spencer said.

Members of the National Federation of Independent Business, the country’s largest small business association, overwhelmingly oppose a minimum wage increase to $15, said Karen Harned, the group’s executive director.

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