Third Way: The Debate Over Minimum Wage
Hispanolistic
Congress is currently debating an increase in the federal minimum wage, which is currently $7.25 an hour, to $15 an hour. The measure, which is included in Biden’s relief plan in the House of Representatives but not in the Senate, faces both a bipartisan split as well as a disagreement within the Democratic party. Republicans are notoriously against raising the minimum wage, especially by such an extreme amount. In contrast, the progressives of the Democratic party believe that raising it to $15 an hour is not only necessary but still not enough, while some of the moderates are hesitant about even raising it to $15 an hour.
The Republican party line regarding an increase of minimum wage revolves around the fact that there would be fewer jobs available if the wage were to increase, as companies would likely cut their number of employees as they would otherwise turn less of a profit if they increased their employees’ wages but continued to employ the same number. Currently, corporations such as fast food companies who typically pay minimum wage are struggling to find employees willing to work for them. This might appear as a surprise, given the number of people who lost their jobs during the pandemic. Yet, it actually could have been predicted.
The Republicans blame this labor shortage on the unemployment benefits that were offered during the pandemic, in which everyone who was eligible received $600 a week. By returning to minimum wage jobs, many of these people would then be making less than $600 a week. In response to this labor shortage, many Republicans want to cut the unemployment benefits in order to force people to return to these minimum wage jobs.
However, the unemployment benefits are not to blame. As the Republicans have argued, it does not make sense for a person to make more on unemployment than they do working. However, unlike what they claim, this does not point to a problem with “overgenerous” unemployment benefits. Instead, it has demonstrated a much larger hole in our economy – that people working on minimum wage jobs cannot technically make enough to make a living and support their families.
Yes, the unemployment benefits should not be greater than a minimum wage weekly salary, but in order to fix this, the minimum wage should be changed so that people can actually make a living off their minimum wage jobs. With the current unemployment benefits in place from the pandemic, the people are finally in a position where they have slightly more bargaining power over their low wages.
Looking at both wings of the Democratic party – progressives and moderates – it is unclear as to which wing of the party a $15 an hour minimum wage truly belongs to. Progressives like Alexandria Ocasio-Cortez believe that it is the bare minimum and do not think that it is being raised enough. On the other hand, more moderate members of the party do not think it should even be $15 an hour. Joe Manchin, a Democrat senator from West Virginia, believes that the minimum wage should be raised only to $11 an hour.
Other moderates within the party agree with him as well, such as Senator Kyrsten Sinema. With this being said, as Biden pushes for the $15 an hour minimum wage to be a part of his COVID relief package and to be passed in Congress (although the minimum wage provision is not in the Senate’s relief package), is he trying to initiate a compromise between both wings of the party, or merely trying to win more of the progressives’ support since he is notoriously a moderate Democrat?
There are several reasons why a more moderate approach to the minimum wage should be taken. As stated before, while it should definitely be raised as it is hardly a livable wage right now, raising it too high and too fast can cause considerable damage to the economy and the labor market. For instance, smaller and family-owned businesses would not be able to afford the increased labor costs and might have to shut their doors.
This would disproportionately affect minority-owned businesses who are already at a disadvantage due to their income loss from the pandemic and their inability to secure as many business grants as non-minority businesses. Further, increasing the minimum wage to $15 an hour has been projected to eliminate 1.4 million jobs from the labor market. Although it would bring 900,000 people out of poverty, the proportion of people who would lose their jobs and might then be forced into poverty instead is too far off balance for the increase in the minimum wage to be truly worth it.
Given the arguments of senators and representatives for and against differing increases in the minimum wage, it could be assumed that the public would fall along the same lines. Surprisingly, however, in a Pew Research Center poll, about two-thirds of Americans said that they support raising the minimum wage to $15 an hour. This vast majority includes many Republicans, as well as almost all of the Democrats, both moderate and progressive. It is especially interesting to see how the public’s views on this matter differ from those of their party members in elected office. As most Americans favor an increase in the federal minimum wage to $15 an hour, it should be the government’s responsibility to adequately represent its people and support the vote for the increase in the minimum wage.
While the relief package that was passed in the House of Representatives includes the initiative for a $15 an hour minimum wage, the package in the Senate does not. This discrepancy means that a new bill will have to be introduced into the Senate in order for them to vote on an increase in the minimum wage. It currently seems highly unlikely that such a bill would pass in the Senate since the measure would not even have complete Democratic support, let alone any Republican support. However, the politicians might want to consider the perspectives of the public and their constituents before they fully decide against increasing the minimum wage.
