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Is a $15 per Hour Minimum Wage on the Horizon? Maybe.

February 24, 2021

Originally published in the Connecticut Law Tribune on February 24, 2021

One of the promises of President Biden’s election campaign was to raise the national minimum wage to $15 per hour. While few can argue the current federal minimum wage of $7.25 per hour is a fair wage for most Americans, most states have taken the matter into their own hands by having state minimum wages far above the national minimum. This includes Connecticut, which is moving its minimum wage to $13.00 per hour on August 1, 2021 before settling in at $15.00 per hour on June 1, 2023. 

Proponents of a $15.00 per hour national minimum wage argue an increase to the minimum wage is needed to raise many American’s out of poverty. Opponents argue this is best left to individual states as different regions of the country have different local economies; one size does not fit all. Opponents further argue increasing the national minimum wage will have a devastating impact on local employers whose business models are not designed to support higher wages, which will result in businesses failing and layoffs increasing both of which will increase unemployment. 

For the Democrats and President Biden, the traditional approach to increase the national minimum wage would involve passage of a bill in both houses of Congress with final approval by the President.  While technically only needing a simple majority to pass the measure in the Senate, an oft used tool could be deployed by Republican’s to derail the measure -the filibuster. To stop a filibuster, the Democrats need a 60% majority and that is something they just don’t have.  However, Senator Bernie Sanders (D- New Hampshire) has another idea.  Senator Sanders wants to incorporate a $15 national minimum wage into the currently proposed $1.9 Trillion COVID-19 Relief Bill (the “COVID-19 Relief Bill”). Sanders would then hope to have the entire bill passed by using a procedural shortcut known as budget reconciliation. 

What is Budget Reconciliation and Why is it so Important for the $15 Minimum Wage Movement?

Incorporating a $15 national minimum wage into the COVID-19 Relief Bill and using the budget reconciliation process as a shortcut could be the Democrats best chance at securing a $15 minimum wage. To understand the importance of trying to tie the wage increase into the COVID-19 Relief Bill one must first understand the budget reconciliation process.

The budget reconciliation process was established under the Congressional Budget Act of 1974. Its purpose was to streamline getting bills passed which were related to spending, taxes, and debt.  This mechanism limits debate over such a bill to “only” 20 hours and allows for a bill’s passage with a simple majority vote. Thus, the bill could pass without 60% approval needed to defeat a filibuster. Everyone remember Mr. Smith Goes to Washington? This Act could have saved Jimmy Stewart a lot of pain!

Currently, the Democrats control 50 seats in the Senate with Vice President Kamala Harris holding a tie-breaking vote.  This simple majority is just enough for the Democrats to use the budget reconciliation process to pass its COVID-19 Relief Bill (along with the provisions of a new $15.00 per hour national minimum wage), without ever getting any support from the Republicans!  Of course, this assumes no Democrats defect and vote against the bill. 

The use of reconciliation is not a foreign concept and it is frequently used by the majority party to pass legislation over the objection of the minority party on controversial legislative matters. However, bills are only eligible to be voted on through the reconciliation process if they only impact spending, taxes or debt.  As a result, any bill looking to get passed through the budget reconciliation process must first be deemed eligible by the Senate Parliamentarian, Elizabeth MacDonough. The Senate Parliamentarian’s job is to remove any portion of a bill whose purpose does not have an impact on spending, taxes or debt. This will mark the first hurdle for the $15.00 minimum wage proposal.  If it clears this hurdle it will be permitted to stay in the bill.

The next hurdle the minimum wage increase will face is more daunting, can the Democrats get enough support to keep the minimum wage increase in the COVID-19 Relief Bill without risking the entire bill failing to achieve the 50 votes needed for passage in the Senate.

Where do things Stand?

Passage of the COVID-19 Relief Bill in the House with the inclusion of an increase to the national minimum wage is highly probable given the majority the Democrats hold. However, passage in the Senate is a different story. There, the Democrats only control 50 seats with Vice President Kamala Harris holding a tie breaking vote. This ultrathin majority in the Senate presents a real concern for the Democrats as Senators Joe Manchin (D-West Virginia) and Kyrsten Sinema (D-Arizona) have already come out against the inclusion of the minimum wage increase in the COVID-19 Relief Bill.

Despite having such a narrow path to passage using the budget reconciliation process, this could be the Democrats’ best chance to raise the national minimum wage. Without the reconciliation process, the Democrats can’t overcome the need for 60 votes to defeat the filibuster the Republicans would definitely use to defeat this movement.

Meanwhile, Republicans are already decrying the use of the budget reconciliation process to pass a $15 per hour national minimum wage as a highly partisan tactic and goes against President Biden’s claim to want to unite the country. Should such a hotly debated measure as $15 per hour national minimum wage find its way into the final bill and be passed, it will only add fuel to the partisan fire and further divide the two parties. We can expect all of this to play out during the end of February and March as the end of March is when enhanced unemployment benefits will lapse.

Senator Sanders has long argued that a $15 per hour national minimum wage is “not a radical idea” and that we must “raise minimum wage to a living wage.” The Congressional Budget Office has estimated that such an increase will raise 900,000 American’s out of poverty while costing the United States 1.4 million jobs and increasing the federal budget deficit by $54 billion over the next 10 years. 

Given the current makeup of the Senate, we expect President Biden, Senator Sanders and the rest of the Democrats to have an uphill battle to garner enough support to increase the national minimum wage to $15 per hour.With that said, this could be the best chance for its passage at least until the next election cycle in 2022. Either way, it looks like we will have March Madness after all. Stay tuned.

Robert G. Brody is Founder and Managing Member and Mark J. Taglia is Counsel at the law firm Brody and Associates, LLC.

Brody and Associates, LLC represents management in employment and labor law matters and has offices in Westport, CT and New York, NY. For more information contact us at (203) 965-0560.