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Sunday, February 28, 2021

GOP Senators Counter Democrats With $10 Minimum Wage By 2025

GOP Sens. Tom Cotton (AR) and Mitt Romney (UT) unveiled a proposal to raise the federal minimum wage to $10 per hour by 2025, countering a $15 hourly increase baked into the Democrats’ $1.9 trillion stimulus package.

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Federal minimum wage has been $7.25 since 2009, which is approximately $15,000 per year for a 40-hour work week.

According to Axios, “In addition to gradually increasing the federal minimum wage and youth minimum wage each year after the “COVID-19 emergency,” Romney and Cotton’s proposal would mandate E-Verify for all employers to ensure the rising wages go to “legally authorized workers.”

Senate parliamentarian Elizabeth MacDonough will rule as soon as Wednesday whether the Democrats’ $15 an hour wage hike will be included in the broader stimulus, which would be voted on through a budget reconciliation process requiring a simple majority to pass. According to the report, if the $15 increase doesn’t make it into the final package, it will likely need bipartisan support.

Democrats have long pushed for an incremental minimum wage hike to $15 an hour, but the president has said that he doesn’t expect the provision to survive negotiations — especially after two moderate Democrats came out against including the measure in the massive relief package.

  • Biden has promised to promote a standalone bill to raise the minimum wage.
  • The $10 an hour proposal by Republicans could act as a first step to compromise in passing a separate bill, but it’s unlikely that Democrats will accept the provisions related to undocumented immigrants. –Axios

According to the nonpartisan Congressional Budget Office, raising minimum wage to $15 would result in 1.4 million jobs lost by 2025, though 900,000 people would be lifted out of poverty.

  • The cumulative budget deficit over the 2021–2031 period would increase by $54 billion
  • From 2021 to 2031, the cumulative pay of affected people would increase, on net, by $333 billion—an increased labor cost for firms considerably larger than the net effect on the budget deficit during that period.
  • That net increase would result from higher pay ($509 billion) for people who were employed at higher hourly wages under the bill, offset by lower pay ($175 billion) because of reduced employment under the bill.
  • Employment would be reduced by 1.4 million workers, or 0.9 percent
  • The number of people in poverty would be reduced by 0.9 million

Zerohedge

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