The battle over whether to keep a minimum wage hike in President Biden’s COVID-19 relief package is heating up, with key players on both sides of the issue digging in for the fight.
The debate is threatening to create deep divisions among Democrats as they move forward with an economic rescue package without GOP support.
Outside groups are also exerting pressure on progressive and moderate Democrats to boost the rate from $7.25, where it’s stood since 2009, to $15 an hour.
Ever since President Franklin Delano Roosevelt signed into law the United States’ first national minimum wage in 1938, there have been Republicans and fiscal conservatives insisting that minimum wages are a job killer. FDR, however, told Republicans to relax — a mandatory 25 cents per hour wouldn’t destroy the U.S. economy or hamper the success of his New Deal — and 81 years later, a Congressional Budget Office (CBO) study is showing that increasing the national minimum wage to $15 per hour would be economically beneficial. Naturally, fiscal conservatives are scrambling to spin the study to their liking.
The benefits, according to the CBO: Americans living belong the poverty line would see a 5.3% earnings increase, and wages would rise for up to 27.3 million workers. Workers already making more than $15 per hour would likely see their wages rise as well.
That’s the positive part of the CBO’s cost/benefit analysis, which also found that under a $15 minimum wage, Americans would be paying about 0.3% more for goods and services. Business owners would see a higher overhead if they started paying employees more.
View the complete July 11 article by Alex Henderson on the AlterNet website here.
The following article by Jared Bernstein and Ben Spielberg appeared on the Washington Post website on February 26, 2016:
Jared Bernstein, a former chief economist to Vice President Biden, is a senior fellow at the Center on Budget and Policy Priorities and the author of “The Reconnection Agenda: Reuniting Growth and Prosperity.” Ben Spielberg works on issues related to inequality, economic opportunity and full employment at the Center on Budget and Policy Priorities.
In 1938, President Franklin D. Roosevelt signed the nation’s first minimum-wage law. It set the wage at $0.25 an hour and covered only a fifth of the workforce. Speaking to the country the night before he signed the bill, Roosevelt told listeners to “not let any calamity-howling executive with an income of $1,000 a day” tell them “that a wage of $11 a week is going to have a disastrous effect on all American industry.”
Last August, almost 80 years later, the city council of Birmingham, Ala., voted 7 to 0 (with one abstention) to become the first city in the Deep South to enact a minimum wage above today’s federal level of $7.25. The ordinance planned an increase to $8.50 per hour by July 2016, with a second increase to $10.10 set for July 2017.
In response, state lawmakers leapt from “calamity-howling” to obstructionism. The Alabama legislature this past week passed a bill designed to block Birmingham and other cities not just from raising the local wage floor but also from mandating benefits such as paid sick leave. Alabama House Speaker Mike Hubbard (R) insists that the bill isn’t about the policies themselves but about preventing “all sorts of problems” that arise when cities are allowed to set their own minimum wages, presumably because there’s nothing preventing local businesses from relocating to avoid the higher labor costs engendered by an increase. Continue reading “No, raising the local minimum wage doesn’t hurt local businesses”
