Politics Business Roundtable opposes minimum wage hike in relief package
$15 minimum wage debate: Everything you need to know
House Democrats have included a minimum wage hike in their latest Covid relief bill, although opposition among some Senate Democrats means it is not at all clear they will have the votes to pass it. © Scott Olson/Getty Images Demonstrators participate in a protest outside of McDonald's corporate headquarters on January 15, 2021 in Chicago, Illinois. Improving worker pay is unrelated in that raising the minimum wage has long been a Democratic priority.
The Business Roundtable urged Congress to exclude a federal minimum wage hike from the COVID-19 relief package, arguing any increase should be designed to reflect regional differences in pay.
The trade group, which represents corporate CEOs, did say the relief measure should be passed without the wage hike as quickly as possible.
"Business Roundtable continues to support an increase in the federal minimum wage. However, we believe that the increase should be thoughtfully designed to reflect regional differences in wage rates and not undermine small business recovery," Business Roundtable CEO Joshua Bolten wrote in a letter late Tuesday.
The problem with a one-size-fits-all federal minimum wage hike
Minimum wages are not a free good. They have tradeoffs. While politicians might not pay much mind to such economic arguments, they are well aware of the regional differences among their constituents. If they listen, they should reject a one-size-fits-all federal minimum wage hike and, instead, let cities and states make decisions that best suit the people in their communities.Ryan Young is a senior fellow at the Competitive Enterprise Institute and author of the study "Minimum Wages Have Tradeoffs.
"In the context of a major recession involving millions of small business job losses, this will require an appropriate phase-in and, potentially, triggers tied to the end of the pandemic," he added.
The House on Friday is expected to vote on a package that would raise the federal minimum wage to $15 per hour by 2025.
Video: House to vote on Covid relief bill Friday, including $15 federal minimum wage (CNBC)
The language faces an uncertain future in the Senate, however, due to procedural rules and opposition from Sen. Joe Manchin (D-W.Va.), who has suggested raising it to $11 an hour and indexing it to inflation.
Separately, the Senate parliamentarian is expected to make a determination as early as Wednesday on whether raising the minimum wage to $15 per hour can be included in a budget reconciliation package.
Tom Cotton, Mitt Romney's $10 Minimum Wage Plan Criticized for Being Less than Arkansas' $11
"Incrementally increasing a pitiful 7.25 wage to $10 over 5 yrs is a cruel joke. Poverty cannot be overcome just by $2.75/hour more," Democratic Michigan Representative Rashida Tlaib wrote.The GOP plan, entitled the Higher Wages for American Workers Act, would gradually raise the federal minimum wage from its current rate of $7.25 an hour to $10 an hour by 2025. The plan would also require employers to phase in the use of the federal E-Verify system to ensure that only documented laborers, and not undocumented immigrants, are hired. Lastly, the plan would provide stiffer penalties to employers who hire undocumented workers.
The ruling is critical, as Senate Democrats are using the budgetary rules to move the COVID-19 relief legislation through the Senate to avoid a filibuster. It would take 60 votes to pass the package with the minimum wage hike if the parliamentarian rules it is ineligible for inclusion under the special budgetary rules.
Bolten said that the minimum wage issue should be debated in future legislation and not in this package.
This letter is the first time the Business Roundtable has sent Congress their recommendations on raising the minimum wage, but the trade group said earlier this month the issue would be better debated in later legislation.
Bolten stressed the need for the COVID-19 relief package to provide "targeted assistance" and "prioritize measures to strengthen the public health response and address short-term, emergency needs."
He also said the priority should be the allocation of resources to scale up the vaccine distribution program, focusing on underserved populations and communities of color.
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