House Passes $15 Minimum Wage Bill Key to 2020 Campaign Message

(Bloomberg) -- The U.S. House approved legislation that would more than double the federal minimum wage to $15 an hour, fulfilling a campaign promise of Democrats who control the chamber and intend to capitalize on the pro-worker issue again in 2020.

The legislation that passed on a 231-199 vote would boost the nation’s $7.25-an-hour wage floor to $15 by 2025 and then automatically adjust it going forward. This bill has no chance to advance in the GOP-led Senate, but leading 2020 Democratic presidential contenders have highlighted the need to boost pay through a higher minimum wage and other policy changes.

“We must never stop fighting to honor the dignity of work,” Speaker Nancy Pelosi said before the vote. “American workers deserve a raise. No one can live with dignity on a $7.25 an hour wage.”

House Democrats are eager to focus on policy issues after a week rattled by offensive statements from President Donald Trump attacking a group of progressive freshmen Democrat. House leaders were able to assuage the concerns of some moderates and Democrats from rural districts and those in the South, where wages are generally lower, by extending the phase-in by one year

State Action on Wages

The minimum wage hasn’t been increased since 2009, and 29 states and the District of Columbia now have laws that require hourly wages above $7.25. A number of states this year, including Connecticut, New Jersey and Illinois, enacted new laws that raise the state minimum wage to $15 an hour.

Republicans opposing the measure say hiking the minimum wage will hurt small businesses and cause many employers to cut jobs to offset the costs of higher wages. Younger workers would be among those particularly impacted, they say.

Representative Virginia Foxx of North Carolina, the top Republican on the House Education and Labor Committee, said the bill is “unnecessary” and put politics ahead of the needs of workers.

“Increasing the federal minimum wage by 107 percent is a harmful and unprecedented mandate that would result in millions of job losses for vulnerable Americans, small business closures, and significant damage to the U.S. economy,” Foxx said.

Major employers have been increasing their own wages in response to heightened political pressure, including Amazon.com Inc., Target and Walmart Inc. Amazon late last year boosted its minimum pay to $15 an hour as it geared up for holiday-season hiring and in the face of public chastising by Senator Bernie Sanders of Vermont, a leading 2020 Democratic presidential contender.

Candidate Proposals

Wal-Mart has raised its base wage to $11 an hour and in June -- in tandem with a visit from Sanders at its annual shareholders meeting -- Chief Executive Officer Doug McMillon announced the company will urge Congress to raise the wage. It was a rare step for the nation’s biggest employer to demand action on an issue it’s long been attacked over, although McMillon didn’t endorse the $15-an-hour boost Sanders and other Democrats seek.

Other leading Democratic presidential contenders also back a $15-an-hour minimum wage, including former Vice President Joe Biden, Senator Kamala Harris of California, Senator Elizabeth Warren of Massachusetts, and South Bend, Indiana, Mayor Pete Buttigieg. President Donald Trump opposes it.

The House legislation would phase in the increase in the minimum wage over six years. The U.S. Department of Labor would then adjust it annually based on increases in the median hourly wage for all employees. The legislation also includes a boost in wages for workers who make tips so that they also would eventually see a $15 hourly minimum, although the phase in extends all the way to 2027.

To contact the reporter on this story: Laura Litvan in Washington at llitvan@bloomberg.net

To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Anna Edgerton

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