There's a New Twist in Biden's Ridiculous Push For a $15 Minimum Wage

Mish

Twists and turns abound in Progressives' push for a minimum wage hike.

Progressives Won't Give Up 

Senate parliamentarian ruled that putting a stepped increase in the wage to $15 an hour in Biden’s $1.9 trillion pandemic relief plan didn’t comply with Senate budget rules.

That ruling did not stop progressives. Specifically, AOC Proposed Abolishing Filibuster Rules among other things.

“Really our options right now, at least our immediate options on this specific issue, is to do something about this parliamentary obstacle or abolish the filibuster,” New York Representative Alexandria Ocasio-Cortez said Friday.

Democrats pushing the minimum wage provision say the rest of Biden’s agenda, including infrastructure investments, immigration reform and measures to combat climate change, is at stake. Representative Pramila Jayapal, head of the Congressional Progressive Caucus, said this is a moment that’s “not just about minimum wage -- it’s all the promises Democrats made.”

“We made a promise to raise the minimum wage,” Jayapal said Friday. “We now have to deliver on that promise to 27 million Americans who are not going to be much convinced when we go back in two years and say, sorry the unelected parliamentarian told us we couldn’t raise the minimum wage.”

Fortunately, however, there is at least one Republican Senator who would not go along with the rule changes for elimination of the filibuster is not likely.

Unfortunately, that will not end the matter. Bernie Sanders answered the Progressive's call.  

Bernie Sanders Answers the Call

Vermont Senator Bernie Sanders, the progressive independent who is chair of the Budget Committee, proposed an amendment to the virus-relief bill that would take tax deductions away from large corporations that don’t pay workers at least $15 an hour. That would provide incentives to pay workers a higher wage, and the fiscal nature of the policy would be more likely to pass parliamentarian muster. Senate Finance Chair Ron Wyden also backed using the tax code.

A senior Democratic aide said Senate Majority Leader Chuck Schumer is considering whether to add an amendment to the stimulus that would penalize large corporations that don’t pay workers at least a $15 hourly wage.

Twist Number Three

Two Democratic senators, Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, have said they don’t support raising the federal minimum wage to $15 per hour.

That we knew in advance. 

On February 4, I commented Biden's Push for a $15 Minimum Wage Appears Dead.

It Only Takes One

Given the 50-50 split in the Senate, it only takes one Democrat defection to kill any piece of legislation if no Republicans play ball.

Possible Defections

There are three Democrat Senators in the pool of potential defectors.

  1. Joe Manchin, Wet Virginia
  2. Kyrsten Sinema, Arizona
  3. Jon Tester, Montana

It seems we have at least two defectors even if Democrats changed the filibuster rules.

 AOC Moans

“The fact that we have two people in this entire country that are holding back a complete transformation in working people’s lives, the same people who have held our country together throughout this pandemic, is wrong,” Ocasio-Cortez said.

Time Ticking

With time ticking, Democrats Scramble to Add Wage Hike Without Slowing Stimulus. 

Curiously, despite the fact that at least two Democrats will not go along a minimum wage hike, Senate Majority Leader Chuck Schumer is pondering Bernie's idea.

Senate Majority Leader Chuck Schumer is considering whether to add a provision that would penalize large corporations that don’t pay workers at least a $15 hourly wage, said a senior Democratic aide. That’s the level President Joe Biden proposed to phase in as part of his Covid-19 relief program. 

The prospect of adding a tax measure presents a major complication. Democrats would need to finish writing the new language, vet it, and unite all 50 senators in their caucus behind it.

Will It Stop With Corporate Taxes?

Uh.... No

Asked about the Sanders proposal, House Financial Services Committee Chair Maxine Waters said, “I don’t know about that. I do know that a transaction tax has been talked about in financial services. So I would certainly entertain looking at something like that.”

Hawley to the Rescue?

Here is yet another strange twist. 

A Republican, Josh Hawley of Missouri proposed a similar concept Friday. He proposed requiring companies with revenues of $1 billion or more to pay their workers at least $15 an hour. The plan would require that minimum wage to be indexed to a gauge of median wages after 2025.

Some senior Democrats stopped short of endorsing the idea of a tax penalty as part of the pandemic-aid legislation when asked about it on Friday.

House Ways and Means Committee Chair Richard Neal said, “I don’t know what is going to happen in the Senate so I hesitate to comment.” He also emphasized the importance of meeting the deadline for the aid bill of March 14 -- when enhanced unemployment benefits approved in December expire.

That's one Republican but two are needed without losing someone like Democrat Jon Tester of Montana.

Where Is This Headed?

Perhaps the solution is what I suggested on February 4.

Compromise?

Might there be a compromise?

That's possible. The $11 proposal of Manchin could fly or perhaps something a bit higher like the Arizona minimum wage of $12.15.

Possible Republican Defections in Smaller Hike

  • Arkansas Min Wage $11.00
  • Maine Min Wage: $12.15
  • West Virginia Min Wage: $8.75
  • Arizona Min Wage: $12.15

My guess is either $11.00 or $12.15 will fly especially if small businesses are exempt.

Bad Idea

A wage hike is a bad idea. 

Q: How is that possibly going to induce businesses hard hit by Covid to hire?
A: It won't. It would encourage them to not hire, outsource, or use robots. 

This morning I see the House passed Biden's bill including a wage hike. For reasons noted above it is Dead on Arrival in the Senate.

Mish

Comments (76)
No. 1-19
threeblindmice
threeblindmice

“The fact that we have two people in this entire country that are holding back a complete transformation in working people’s lives, the same people who have held our country together throughout this pandemic, is wrong,” Ocasio-Cortez/the Maoist demagogue said.

threeblindmice
threeblindmice

In order to preserve out institutions, we need to get rid of the filibuster, the parliamentarian, the electoral college, rethink the supreme court and use tax policy to force some citizens to do what we can't otherwise force them to do.

davebarnes2
davebarnes2

$15/hr would mean all the minimum wage (non-tipped) workers in my fair city would get a 23¢/hr raise. I say we go for it.
$15/hr minimum wage for all workers would mean that tipping in restaurants could be eliminated. Yea!

PecuniaNonOlet
PecuniaNonOlet

Sorry Mish but I dont believe arguments of “business argameddon” is minimum wage is increased. If that philosophy were true why didnt we have business argameddon when minimum wage went from$3.80 to $4.25 to $7.25? As a “moving goal post” why would $15/hr now cause armageddon?

At some point min. wag WILL go up and yes some businesses will need to adjust prices but it wont be the end of the world.

The smartest thing in the post was this line “The plan would require that minimum wage to be indexed to a gauge of median wages after 2025.” Why the hell wasnt this done 50 years ago, we wouldnt be having this discussion at all.

Personally, min. wage should be indexed to the debasement of the currency otherwise the system is purposefully desiigned to make you poorer every year pushing people into public dependence - who wants that?

22 Replies

Six000mileyear
Six000mileyear

Minimum wage increases haven't instantly hurt all business in the past because customers were willing to pay the extra costs passed through. The long term effects are measurable, such as the hollowing out of the middle class and the accumulation of debt to maintain the simple lifestyles our parents had.

PecuniaNonOlet
PecuniaNonOlet

Further to my point here is the bigmac index for the last 30 years.

BigMac
Year - BigMac - Wage/hr - Ratio
1990 - $2.20 - $3.80 - 1.72
2000 - $2.51 - $5.15 - 2.05
2010 - $3.58 - $7.25 - 2.02
2015 - $4.79 - $7.25 - 1.51
2020 - $5.30 -$7.25 - 1.36

In 1990, an hour of min wage would buy you 1.72 big macs.
By 2000, min wage bought you 2.05 big macs.
Today, an hour of work can barely buy you 1.36 big macs.

This is a proxy for food but it is worse for fresh veggies and real meats.

njbr
njbr

...the accumulation of debt to maintain the simple lifestyles our parents had....

Food, clothng, shelter--those are the same basics. But I guarantee you the details of those basics today are very different than your parents and definitely very different than the further back ancestors.

How often did your parents or grandparents eat out? What type of food did they eat? How long did they make their clothes last? Did they follow fashion trends? Did they have granite counter-tops, rainfall showers, redo their house every few years?

Beyond the basics--what did they do for entertainment? Did they go to movies, did they have streaming services? Did they spend thousands of dollars a year on a little magic box that relaced the party line that your grand parents may have had and your great-grandparents definitely did not have.

What about trips--did they ever travel far from where they lived? Did they go on
cruises, travel to foreign countries, go across the country on a golf-outing or girls weekend? Did they feel deprived if they didn't get to go somewhere on spring brak?

Did your grand-parent have even one car when they started out on their life? How about having husbands, wifes AND childrens cars? Three, four and five car garages--not that uncommon now.

You don't seem to realize that the period from the 60's to the 80's was a very unusual period in time where it was easy for a person to make a livable life with an ordinary job.

It seems you, like many other take this a a god-given birth-right--that ain't the way it is. The struggle is the same as it always was, it's just that you have higher expectations based on a myth created over an unusual couple of decades.

You buy the myth, and wonder why it is so hard, when the ladder has been pulled out of your reach.

TexasTim65
TexasTim65

Increasing minimum wages are what eventually drove all manufacturing jobs out of this country.

Increasing it further will just drive even more manufacturing jobs out of the country. Eventually all that will be left are the few jobs that can't be moved or automated.

Once upon a time when I was young (70s') most of the jobs that everyone now screams about 'living wage' were just teenagers first jobs (fast food, shelf stocking, lawn mowing/care etc). They didn't need to make a living wage because they were still living at home and this was their first job. Today people seem to think fast food / shelf stocking etc are meant to be living wage jobs. They aren't and never were.

Raise the wages on those jobs and expect them to all disappear as Mish says. Many fast food places already reducing staff with online/app ordering or touch screen ordering and automated burger flipping. More and more self stocking jobs are also being replaced by robots also. It's only going to get worse when the wage rises.

Wages should be set locally (state and/or county level) and not on some national one size fits all scale.

Jojo
Jojo

How about the loaf of bread index? In 1935, you could buy a whole loaf of bread for perhaps 10 cents. Nowadays, the same loaf with the same basic ingredients, will typically cost you somewhere between $1.99 to $4.99!

Since the ingredient amounts didn't change, all of that increase is in the overhead to produce the bread loaf. Some of that overhead is rent, power to cook the bread, business insurance and of course, labor.

Which came first, the chicken or the egg? If you raise wages in any shape or form, that increase is generally caused by someone else in the are a getting an increase or your particular business doing very well.

Regardless, one increase here typically bubbles through resulting in increases everywhere as everyone else in the local economy demands parity raises also.

Ultimately, the products stay the same or generally become cheaper to make due to scale while the cost of making them increases.

Which is why that 10 cent loaf of bread can now be as high as $5!

PecuniaNonOlet
PecuniaNonOlet

Why havent those stocking jobs disappeared when wages went from 3.85 to 4.25 to 7.25? Costco just raised minimum wage to $16/hr! Gasp how is this even possible?

Manufacturing moved overseas for a variety of reasons including the major fact that the supply chain of materials to build things moved to china. Case in point, rare earth materials arent mined in the US anymore, the major source is in China. Why import materials from China when you can just manufacture there if materials and labor are there? Steel is cheaper in China too.

You also claim that mowing lawns wasnt supposed to be a job to live off of so why wouldnt you say the same for manufacturing jobs. Where is it written that manufacturing jobs should have a livable wage, why should any job for that matter?

Should doctors earn a livable wage? Engineers? Tell me what the criteria is to make a man or woman have a decent living should be.

Carl_R
Carl_R

re: "If that philosophy were true why didnt we have business argameddon when minimum wage went from$3.80 to $4.25 to $7.25?"

Minimum wages were increased dramatically between 2007-2009. I recall a business downturn during that time.

Thewarlock
Thewarlock

exactly...I remember Regan wanted to get rid of social security...tried pandering this socialist crap...people didnt fall for it, voted for him once, just once..using scare tactics only works on the stupid...

Thewarlock
Thewarlock

read up a bit son, the big clothing mfg are making under $50 a month in Africa now, taking over from CHina...you really think any american would work for that? FYI back in the 70s, the big steel etc. were paying the equivalent of $80 an hour..had nothing to do with minimum wage going up...its called development, first ag, then lght mfg , then heavy mfg then services...the govt just needs to help train people to do something a little more challenging then fliipping burgers...nobody wants those jobs anyway

TexasTim65
TexasTim65

@PecuniaNonOlet @Thewarlock . You earn a living wage by producing something of value. Not by gov't legislation.

There are many who produce nothing or next to nothing of value. When I'm hiring I always ask the candidate questions like what's the last thing you did that produced extra value for your employer/customer? When's the last time you were promoted and why? You'd be amazed at how many have no clue why they were promoted (if they ever were) and how many give a 1000 yard stare when trying to imagine why they'd ever do anything beyond their basic job description. Needless to say, none are ever hired (and I'm talking professional people with degrees down to hourly wage employees).

There is tons of training available now online for free. Once upon a time when min wage was less (or non-existent) you could just get trained and be paid for by taking a low paying job and learn while doing (not just apprenticeships, but learn the grocery business by starting stocking shelves and moving up as one of my best friends did and is now in corporate HQ management 40 years later).

15/hr will accelerate the trend of automating out more jobs which in turn leaves fewer jobs for people. At least at 7/hr + 8/hr in gov't benefits we get something from them instead of just 15/hr in gov't welfare (where many will end up).

bluestone
bluestone

This is the point. The minimum wage isn't actually going up, its just being adjusted for inflation. Nobody is getting a raise...
But I had an epiphany!!! This classic scene from Spinal Tap is about the minimum wage, AOC is Nigel Tufnell.

PecuniaNonOlet
PecuniaNonOlet

If Costco can find value in paying someone to push carts, check out people or stock shelves at $16/hr then other businesses should be able to as well. Building your labor model on pushing people onto government benefits to make ends meet is corporate welfare.

Labor wage laws exist because there was a time when people would work for companies then not get paid for their work. You need not look far for labor exploitation that happens every day in America.

Jojo
Jojo

Costco is a simplistic example. Costco charges an annual membership fee for one. They also have many side businesses outside of the warehouse business including insurance, travel, business operations, etc. all of which contribute to the overall success of the business.

Perhaps every food store should start charging shoppers and annual membership fee?

ZaDave
ZaDave

The employers you mention, Target, Starbucks, Costco etc. all have massive volume and are very large businesses that will find it easier to absorb the costs of higher wages. I don't believe raising minimum wages is catastrophic to the economy, but it absolutely will incrementally increase unemployment (at least for a time) and raise prices. It will hit smaller businesses the hardest. I live in Alberta, Canada where we aggressively raised the minimum wage from about $10 in 2014 to $15 in 2018 and we now see higher overall unemployment, it's harder to get a job, and prices have absolutely increased to compensate. The problem with raising the minimum wage generally is that it incrementally pushes people out of the work force as some people are now unable to find any job as employers tighten their hiring, and people who were already making higher then minimum wage don't see an increase. So all of this has the effect of increasing income inequality as the poor stay at the bottom or get worse, pushes people near the bottom closer to the bottom, and the rich stay rich as they adjust costs and expenses to compensate.

TexasTim65
TexasTim65

It's very possible Costco is simply increasing wages and dropping benefits to make it look good. Here are their world employee totals for last 3 years (full/part)

2018 (143K/102K)
2019 (149K/105K)
2020 (156K/117K)

Note the large jump in part time in 2020.

Also many Costco stores are in expensive states (Cali/NY etc) where paying more makes sense based on local costs. But in states like Texas where cost of living is probably 1/2 of Cali/NY, why do they need to be forced to pay large wages there? Same with Starbucks etc. Pay should be based on local costs, not some magical national number (like 2% inflation)

Quanta
Quanta

$15/hr is a pathetic un-livable salary, even out in TX.
This is especially true for anyone who has not inherited housing from their mommy and daddy, and has housing cost of any kind.

Businesses that cannot support $15/hr should not be in business. Yes that includes small businesses. I have one, and I pay $25/hr. I have voluntarily paid > $15/hr even as far back as 2005 or thereabouts.

Jojo
Jojo

When someone's parents made them, I don't believe that a contract gets signed stating that in their future, they will be guaranteed a livable wage for work performed. Or that they will be guaranteed a job at all. Or happiness. Or anything else.

Perhaps would-be parents should think harder on the future they want to provide to their future kids before making them.

Quanta
Quanta

It's disappointing that smart people like you have been brainwashed by the oligarchs into thinking that a small number of oligarch private interests competing with one another will somehow solve society problems. As compared to a representative government elected by the people, flaws and all.

I don't see any reason why the government (for the people) should not guarantee that people living here be paid a minimum amount for their work.

I run a small business, plus I work for a large S&P500 corporation during the work week, and it is plain to see when estimating project costs that at this point in 2021 , $15/hr barely starts paying for the costs involved of even sitting on your rear all day and doing nothing. So anybody doing something usefl should be guaranteed a minimum wage.

Quanta
Quanta

"15/hr will accelerate the trend of automating out more jobs which in turn leaves fewer jobs for people. At least at 7/hr + 8/hr in gov't benefits we get something from them instead of just 15/hr in gov't welfare (where many will end up)."
I'm totally disgusted. The one who is on government welfare is YOU Mr. TexasTim65 and YOUR BUSINESS, while the rest of us have to pay for you running people into the ground so you could have the perks. You're transferring money from our taxpayer pockets, to yours, sir. I sincerely hope that all businesses that cannot pay $15/hr are permanently closed. And if that means gov't welfare, so be it.

rodgerreno
rodgerreno

if you can't afford to pay a living wage, you should not be in business. my tax dollars keep your employees alive by medical and food support and perhaps housing. You have become a billionaire by exploring the support systems. everyone is aware of these facts but change is yet to happen. Do we have to have a coup to force the government to do the will of the majority.

Doug78
Doug78

The best way to have minimum wage increases is to have a booming economy creating conditions for low-wage workers to have bargaining power. Since economic conditions are local minimum wages should be set at the state level. Using the Supplemental Poverty Method (SPM) used by the US Census Bureau should be the measure of what a living wage is by state should be the yardstick.

Six000mileyear
Six000mileyear

And my rant continues... minimum or living wages prevent the formation of companies by increasing start-up costs. Established companies have less competition; therefore, consumer prices can be driven higher and new products / improvements can be suppressed. Monopolies prevail.

AnotherJoe
AnotherJoe

So lets see Mish you are against paying a minimum living wage. You are also against unions (union workers always make more). So my guess is that you are %100 supportive of poverty and exploitation. Or do you actually think that "market forces" will increase the minimum wage? As for your comment on "It would encourage them to not hire, outsource, or use robots" well last time I checked even people in India/China (making slave wages) are being replace by robots or outsource by even cheaper countries. BTW real wages have been dropping for decades now, trickled down economics does not work. So here is my position billionaires and multi-billionaires have to much power. Cut their power by 1/2 (to start with) by taxing their wealth and keep taxing them until they are willing to lose that power.

Sechel
Sechel

Not that I'm pushing this solution but wouldn't a subsidy from the government to the worker making up the difference between the hourly rate and $15 be the better option. In this way employers don't curtail hiring. When New York raised the minimum wage a number of supermarkets responded with shorter hours and self checkout. The workers didn't fully benefit. Maybe some did but not all. raising the minimum wage is really a wealth transfer from the middle class. The rich are not really impacted

Jojo
Jojo

Wouldn't $150/hr be better for everybody? We could all catch up to the doctors, lawyers and CEO's then!

Why Not Make the Minimum Wage $150 Per Hour?
PF Whalen
February 22, 2021

The periodic debate regarding raising the minimum wage has resurfaced once again, only this time the argument is connected to the larger discussion surrounding a sprawling, $1.9 trillion COVID relief bill; for some inexplicable reason. In the bill unveiled by House Democrats last Friday, if passed, the minimum wage would increase incrementally from the current $7.25 per hour to $9.50 per hour this year, and eventually escalate to $15 per hour by 2025. Prominent Democrats across the board have supported the idea, including President Joe Biden.

If we deep-dive the issue in trying to understand its full impact, we can learn a great deal about the pros and cons of increasing the minimum wage; particularly with the cons. But there are two pieces of information that are difficult to come by. How, specifically, did we arrive at the number of $15? And, based on the Democrats’ reluctance to acknowledge the negative impacts of a minimum wage increase, why don’t we just add a zero to the number and increase the minimum wage to $150 per hour?

...

njbr
njbr

It's kind of sad with the deluded twists of logic--higher wages drove manufacturing out but we want the same life as our parents had or better.

Well genius--your parents had remarkably good benefits and high wages--low wages will not give you the life that your parents had and maintain the infrastructure you want.

Sechel
Sechel

There is a problem if the minimum wage fails to cross the poverty level. Seems we need to address this

gstegen
gstegen

Seems like the immediate rise to $9.5 and the first couple of years of increases to about $11 is widely supported and would likely pass if the out year increases to eventually $15 were left off for now. This kind of compromise to get some sorely needed help to lowest paid seems like a good way to get some immediate progress.

MATHGAME
MATHGAME

Very interesting how the people who have so much problem with increasing the minimum wage for the lowest paid workers in the country seem to have no problem with the fact that the compensation of CEO and other highest paid workers has increased nearly 10X over the past 4 decades.

Just one of a huge number of links reporting the same information, along with an equally huge number addressing the ever-widening "wealth gap" ...

Argue about the reasons all you want, but the reasons are not going away. Both the goal and the means of crony capitalism (the only kind that eventually exists, precisely because of human nature) is the accumulation of more and more wealth into fewer and fewer hands, so the constant whining from all the crony capitalists about increasing the minimum wage is understandable.

I do agree with the other posters who have said that minimum wage should be set at the more local level ... trying to establish aa national minimum wage ignores too many of the differences of location.

MATHGAME
MATHGAME

Also, increasing income on a percentage basis (an often increasing percentage with increasing income no less) while any product or service requires a fixed expenditure is another means by which the wealth gap is exacerbated ... a simple differential equation shows that.

Captain Ahab
Captain Ahab

Applying the concept of perceived value to labor, can anyone give me a reason why anyone should be paid more than his/her value contribution. That order taker at MacDonald's, for example; how much does he/her contribute to the value of a single burger. At most a few cents--order service generally sucks at most fast food restaurants? Do the math. Per hour, if the order taker generates less value than his/her hourly rate, his/her job will soon disappear, replaced by a low-cost alternative.

So, before we increase the 'minimum wage', lets talk about how to increase the value of work. Perhaps a better education and work habits, developing employee skills... etc.

Quanta
Quanta

Businesses that cannot pay the pathetically small $15/hr are precisely those same businesses that do not generate much of anything of value and need to be closed due to mooching off the government and the rest of us. It is the rest of us that pay for those employee basic benefits like healthcare.

omera
omera

Mish, arguing about higher minimum wage will reduce employment, increase outsourcing and usage of robots.... have you ever looked around? What you have been suggesting that will happen if the wage is increased have been happening even federal minimum wage parked at $7.25/hr since 2009. Small business do need government support, at least for retirement and health care. But corporations? not so fast. Costco already agreed paying $16/hr. So, it seems Amazon (I believe it when it is confirmed w/o any strings attached). Uber has been investing in AI for driverless cars for years now while Uber/Lift drivers were begging voters to reject a ballot proposal in CA that would force Uber and alike companies to make drivers employees rather than contractors. There is growing number of companies pushing their services as part time outsourced work from accounting to HR, digital web based software development to project management. All pushing part time "I am my own boss choosing my own hours" dream. The reality...obviously is different. No benefits, paid time off, health care etc. May be this is the future of employment ..at least a while until these naive souls wake up and smell the coffee but please don't make the minimum wage increase as the cause. It has been already happening because when cost is the driving force alone. The respectful, smart corporations who value their employees rather than bottom line and look for long term growth see through this twisted scare tactics.

-Akhenatenx-
-Akhenatenx-

Well! If you are going to raise the minimum wage !

Why not raise it to $50 Dollars an hour!

That way my girlfriend that works at Burgerking can take me out to the Ritz Carlton !! ;0)

Oh! Wait!!
Won't a Burger King burger go up to $25 Dollars a burger if the minimum wage is $50 an Hour???

Or am I just being silly?

Going from $7.50 an hour minimum wage to $15.00 is only a measly increase of 100%.

Raising the minimum wage isnt going to increase the cost of that $3.00 hamburger to maybe $6.00 Dollars a burger will it ??

Rents WON'T go up either Right??

Are they you caring Democratic Socialists??


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