Friday, May 14, 2021

The fight for $ 15: Can Joe Biden usher in a higher minimum wage?

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Mendy Hughes, a Walmart employee in Melbourne, Arkansas, earns $ 11.62 an hour, a salary so low she has to live on baked potatoes and TV dinners. Sometimes she skips meals altogether to save money.

“I can hardly get out of this,” said Ms. Hughes, 46, a single mother of someone who has worked for the retailer for more than a decade. “I can’t afford to buy groceries. I can’t afford to pay my bills.

Ms Hughes is one of some 32 million people living in the United States who earn less than $ 15 an hour, many of whom rely on the new president to increase their wages.

Since taking office, Biden has made a concerted effort to raise the federal minimum wage, which has been stuck at $ 7.25 an hour since 2009. His $ 1.9 billion in economic stimulus the package includes a provision to roughly double it to $ 15 over time.

The president’s efforts have thrilled those on the progressive left, who have long allied themselves in the “fight for $ 15,” while disrupting business and sparking opposition from Republicans.

Bind the minimum wage The fiscal stimulus package fulfills one of the key commitments Mr. Biden made during last year’s election campaign, when he courted support from unions and low-wage workers.

But it also risks complicating the swift passage of his stimulus bill. As Republican lawmakers ask him to drop the plan’s minimum wage increase, many Democrats, especially on the left, are doubling down on his inclusion.

“We can no longer tolerate that millions of workers cannot afford to feed their families or pay the rent. The time to talk is over. No more excuses, ”said Bernie Sanders, US Senator from Vermont this week.

Bharat Ramamurti, deputy director of the White House’s National Economic Council, told the Financial Times that Mr Biden sees a higher minimum wage as a “moral issue” that has become more urgent during the pandemic.

Many of those earning the lowest wages have been classified as essential workers, meaning they must continue to report for work despite the increased risk of catching the virus.

“His point of view is nobody. . . should work 40 hours a week and live in poverty, ”Ramamurti said. “It’s a way to compensate [essential workers] for the risks they have taken and will continue to take while this pandemic occurs.

Mr Biden’s push for a pay hike reflects a shifting consensus among economists on the impact of pay hikes. Decades ago, it was generally thought that more generous wages would trigger soaring unemployment, but this finding is now less common.

“There was originally a lot of concern about this. . . some people would benefit but many would lose their jobs, ”said Molly Kinder, a member of the Brookings Institution in Washington. “Today, the generally accepted wisdom among economists is that these concerns are exaggerated.”

Jason Furman, an economist at Harvard University who chaired Barack Obama’s council of economic advisers, said a rapid increase in the minimum wage in a weak labor market would be problematic, but a gradual increase was less risky .

“I think about most of it. . . will take place after the economy is expected to have sufficient demand and sufficient expenditure, ”he said.

Advocates of a minimum wage increase say it will bring economic benefits, including increased disposable income for consumers with a high propensity to spend, less strain on the government safety net, and reduced economic disparities. racial.

A growing number of cities and states – most recently conservative Florida – have approved minimum wage increases, a sign of growing public support for the measure, particularly during the pandemic.

But despite the change in economic and public opinion, most Republicans remain opposed to the proposal. Their main concern is that while large companies may be able to absorb higher wages, small businesses, already faltering during the pandemic, will suffer.

Rick Scott, the Republican Senator from Florida, said last week that a minimum wage increase could “kill our small businesses.” The National Restaurant Association has said the current debate is “not good news” for an “economically plummeting industry.”

Most political experts believe Mr Biden will struggle to pass minimum wage legislation in the short term, but the president can still take action to raise wages.

For example, he ordered his administration to prepare an executive order that would require federal contractors to pay $ 15 an hour if they wanted to continue doing business with the government.

Mr. Ramamurti of the NEC insists that the president is not about to give up the fight. He argues that a pay rise is one of the best ways to meet demands from Republicans and some Democrats that the next round of budget support be “targeted” on those who need it most.

“It is not more targeted than the minimum wage. They are by definition low-income people. . . who work and absorb risk every day while working during a pandemic, ”he said.

Precious Cole, an activist with Fight for $ 15, the campaign group that earns $ 12 an hour at a Wendy’s restaurant in Durham, NC, is among those who are hoping Mr. Biden will succeed. The 33-year-old had to take a second job in a fast food restaurant to tackle rising credit card debt and help care for her elderly mother.

“You call us essential workers, but you have to start paying us as essential workers,” she says.

Additional reporting by Courtney Weaver in Washington

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