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?

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.

10 Replies

Sechel
Sechel

I'm against public sector unions but not private ones. Reason is heads of government trade votes for wages and benefits

TexasTim65
TexasTim65

Mish is only against public sector unions which is where tax payers get fleeced with no say on things. He doesn't care about private sector which is between the business and union. I agree fully with his stance.

Raising the wage won't really help as much as everything things. Everyone else in the area will ultimately want their own wage increased by however much it increase. So if you local min wage is $10, then if it increases to 15, the guy making 15 will need 20 and the guy making 20 will need 25 and so on or else they all fall behind. All that will happen is everyone gets a $5 increase which means no one gets a $5 increase!

The only way to raise yourself out of poverty is to increase your personal value (create enough value to a business that they pay you more or start your own business to earn more).

Jojo
Jojo

I'm against ALL unions. Either everybody gets to be in a union and get sto enjoy the benefits or no one should. Otherwise we just extend the inequality that exists throughout our society.

Thewarlock
Thewarlock

your kidding, your against unions because of inequality? Read some Pikkety, all the big jump in inequality happened when the unions in the US went away...the free market has major problems which need to be addressed, if not you, your kids etc. will all be victim of crime from the increasing number of poor, pissed off non union workers..look at the capitol invasion...had nothing to do with politics, just a bunch of uneducated low income folk who thought they were helping out the only guy they thought could help...now, those that are not arreseted, go back to their non union, minimum wage jobs...till the next time

RonJ
RonJ

"Read some Pikkety, all the big jump in inequality happened when the unions in the US went away"

Correlation is not causation. Pikkety could have said that the big jump in inequality happened when McDonald's created the Big Mac.

Pikkety said the tax rate should be 80%. The previous French president raised it to 75% and a number of French businessmen moved to Belgium as a result. The rate hie was later abandoned. Pikkety sounds good on paper, but not in practice, as for each action, there is an equal and opposite reaction.

Jojo
Jojo

Now step into the reality of today's world. WHY should union members be treated differently than those who are not in a union?

For example, why should workers in non-union food store be paid less, enjoy less benefits and less security than the worker in a union store a few miles away?

You might retort "we'll go join a union then". But joining isn't an individual decision. Creating a union requires others wanting to do so and if enough don't agree, then all those who might want to be in a union are SOL.

The only equitable way is that either everyone is in a union or no one is.

AnotherJoe
AnotherJoe

"is to increase your personal value (create enough value to a business that they pay you more"

Minimum wage work is volume work. In other words workers are easily replaceable. Minimum wage has not increase in real terms of inflation and productivity gains for decades. Under your premise it must be that workers don't create enough value. However, CEOs pay has increase many times over during that time so did the workers add value or not? I would assume that the CEOs are being paid handsomely so I can only guess it is due to the workers adding value.

The reality, is that we have a captive government that is in the hands of big corporations and its executives that help create tax laws and regulations that favors them.

We are devolving into a feudal state were the new "lords" are the CEOs and billionaires. The vassals should be happy of the crumbs given and never question a system were inequality increases year after year unabated (crises or not). And just like during feudalism you have all these billionaires "philanthropists" given some of their wealth to the causes they favor. Not very different from the Medici in Italy supporting the arts for example.

In case you think I'm exaggerating here is another example:
"Nevada's governor on Friday unveiled a proposal that would allow technology companies to establish jurisdictions with powers similar to those of county governments, arguing the state needed to be bold to diversify its economy and pushing back against those who have likened the idea to company towns."

just saying...

Quanta
Quanta

Totally uneducated comment. Inequality grew with the abandonment of labor unions.

Jojo
Jojo

You are entitled to your opinion, no matter how wrong it may be.

The reality is that private unions are down below 10% of the working population now. Once the robots replace most workers, this number will go to zero. The old days ain't coming back.

Quanta
Quanta

Don't hold your breath, Mr. Oligarch sympathizer. People have always organized around their needs, whether villages, tribes, professions etc... The defeat of unions and the defeat of the U.S. government by the corporate elites is temporary. Democratic Socialism (like France) is going to come back one way or another, together with protections for workers. Vast majority of people in the U.S. have already recognized that something isn't right. Some of the less educated have been tricked into voting for Donald Trump. Once the anger is properly re-directed at the multi-billion corporations, changes will happen.

As far as your comment about robots - yes they will come. Not just for jobs, but for you and me eventually for target practice.

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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