More than a decade after the federal minimum wage last went up, an increase may be included in the COVID-19 relief package under consideration in Congress. That bill is planned to be passed through reconciliation—in other words, through a simple majority vote—in the Senate, which makes it a great place for the minimum wage, since Republicans would certainly filibuster that.
As a reminder, more than 60% of Florida voters passed a $15 minimum wage measure in 2020 even as the state went for Donald Trump. This is a popular issue with the public, even though Republicans have made it a contentious issue in Congress.
Conservative Democratic Sen. Joe Manchin said Tuesday that he doesn’t support a $15 minimum wage because he thinks $11 an hour, adjusted for inflation, would be adequate for his state of West Virginia. In fact, $11 an hour is a living wage for a single adult in West Virginia right now. For a single parent with a child, it’s half of a living wage. And the Raise the Wage Act of 2021 doesn’t get to $15 until 2025. It doesn’t even get to $11 until 2022.
Opponents of raising the minimum wage from its current historically low level also often claim that it would reduce jobs. The best available research contradicts that: Work by University of Massachusetts economist Arindrajit Dube looks at every border between counties where the minimum wage went up on one side of the border and not on the other, finding no job loss in key industries.
So the minimum wage is popular and most of the arguments against it just simply don’t hold up. Can it pass now, through reconciliation, if Democrats can bring Manchin along?
The reason the Senate doesn’t just pass everything through reconciliation is that it can only be used for “legislation that changes spending, revenues, and the federal debt limit.” Showing that the minimum wage meets that test is a key procedural hurdle, which the Economic Policy Institute is taking head on. In short, raising the minimum wage should qualify to pass under reconciliation because it will affect federal spending on public assistance programs like the Earned Income Tax Credit and Supplemental Nutrition Assistance Program.
Ben Zipperer, David Cooper, and Josh Bivens look at multiple economic models of the effects of a $15 minimum wage and estimate big savings:
- Earned income tax credit (EITC) and child tax credit (CTC) expenditures would decline by somewhere between $6.5 billion and $20.7 billion annually.
- Expenditures on the Supplemental Nutrition Assistance Program (SNAP) and other major government transfers would fall by between $5.2 billion and $10.3 billion annually.
- Reduced annual expenditures on SNAP alone would range from $3.3 billion to $5.4 billion.
Adding those things up, at the low end it’s an estimated $11.7 billion a year in decreased expenditures, and as much as $31 billion. Additionally, because 32 million people would have larger paychecks, payroll taxes could go up by $7.0 billion to $13.9 billion.
It’s time. Raise the minimum wage, index it to median wage growth, and never again have the nation go for more than 10 years without a raise.
This blog originally appeared at Daily Kos on February 3, 2021. Reprinted with permission.
About the Author: Laura Clawson has been a contributing editor since December 2006. Clawson has been full-time staff since 2011, and is currently assistant managing editor at the Daily Kos.
