Understand more. Argue less.

Good morning. While it appears that the minimum wage will not be included in Biden’s $1.9 trillion stimulus package, this certainly won’t be the last time it comes up. Let’s dive into the debate.

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WHAT YOU NEED TO KNOW

Jenna Gibson

In a refreshing return to politics as usual, the minimum wage has come to the forefront of Congressional debate. Established after the Great Depression in 1938, the minimum wage hasn’t been increased since 2009, when it was raised from $6.55 to $7.25. Democrats attempted to increase the minimum wage to $15 in 2014 and 2019, but were unsuccessful.

President Biden tried to follow through on his campaign promise of a $15 minimum wage, by including it in his $1.9 trillion Coronavirus relief package. However, any sort of raise will have to wait: the Senate Parliamentarian (i.e. Senate “referee”) ruled that the minimum wage increase could not be included in the budget reconciliation process. Democrats are using budget reconciliation to fast track the stimulus, but are unable to include a minimum wage clause as it’s not a budget item. While Biden stated that he is “disappointed” with the Senate Parliamentarian’s ruling, he also made clear that he will not overrule the decision. 

Yesterday, some progressives indicated that they might withhold their votes if it’s not included in the final bill. Barring any progressive defections, Congressional leaders are hoping to send that legislation back to Biden by March 14th, which means aid may be on its way to many Americans soon.

Here’s what else you need to know.

The Facts

• Mixed signals. A study by the nonpartisan Congressional Budget Office predicted that a $15 federal minimum wage would add $54 billion to the federal debt and eliminate 1.4 million jobs, but increase wages for 17 million and lift 900,000 people out of poverty by 2025. (Hill)
• State action. States and counties have taken matters into their own hands. At the beginning of this year, 20 states and 32 cities and counties raised their minimum wage. In 27 of those places, the minimum wage is at or above $15 per hour. (Department of Labor)
• Past its prime. Scaling for inflation, the minimum wage held the most value in 1968, at $1.60 per hour ($12.28 in today’s dollar). Today, the minimum wage stands at $7.25 per hour, over $5 less than its inflation-adjusted 1968 peak. (Rand)

NARRATIVES

Katherine Chuang

Here are the narratives from both sides, along with supporting headlines and article snippets. These are not necessarily factual, but instead illustrate the news coverage that solidifies the narrative from each side. The bias ratings refer to news outlets as a whole, not a specific article.

BOTTOM LINE

What Does It All Mean?

Depending on where your news comes from, the minimum wage debate might sound something like this...

• If your news outlets lean Left, you see countless studies that show a minimum wage increase that is necessary and safe, with a steady stream of experts backing that up. You view the Right’s resistance to a minimum wage increase as a manifestation of outdated economic fears. You feel that while some jobs may be lost, increasing the quality of life for millions of Americans makes it worth it.
• If your news outlets lean Right, you hear about small businesses forced to close and feel that a minimum wage increase is the last thing they need. It’s more idealistic than realistic, and you think that it’s just another out-of-touch progressive policy that can’t move forward. You may still view a minimum wage increase as a priority, but something that should be done gradually and cautiously—without unnecessary government meddling.

A minimum wage increase is still a possibility: 67% of Americans support a $15 minimum wage. The problem? Nobody really knows exactly what will happen if it’s passed and accurately predicting the economic implications isn’t easy.

A study from Massachusetts Amherst summarized 55 academic studies (36 in the US) of instances where a minimum wage was introduced or raised. They found that in most cases, a 10% minimum wage increase might lead to a 2% percent loss in employment. Both sides have interpreted that finding differently: some say 2% isn’t worth the wage increase, while others view it as a necessary cost.

In February, a report from the Congressional Budget Office (CBO) provided data that only fueled opinions on both sides. Advocates of an increased minimum wage point to findings from the CBO study which estimated that a $15 minimum wage would impact the wages of 17 million Americans and lift 900,000 people out of poverty by 2025. On the other hand, that same CBO study also predicted that a $15 minimum wage would cause 1.4 million Americans to lose their jobs by 2025. 

Two weeks ago, Republican Senators Mitt Romney and Tom Cotton brought a $10 minimum wage proposal forward. The Congressional Budget Office found that this amount would leave employment and poverty levels more or less the same. Still, increasing the minimum wage may not be the only way to help low-wage workers. A proposed corporate tax has received bipartisan support from several Senators, chiefly Josh Hawley (R) and Bernie Sanders (D). This alternative to the minimum wage would tax big companies (over $1B in revenue) for paying their workers less $15 an hour and provide tax credits to qualifying Americans.

Even if the strategies and solutions differ, there has been surprising bipartisan support around the needs of low-wage workers. This is a good sign that these discussions will continue and a compromise may someday be reached.

IN OTHER NEWS

What Else We're Following

• President Biden vows that there will be enough vaccines for all US adults by the end of May (AP News)

• Biden’s cabinet budget pick Neera Tanden drops out of nomination process after confirmation process unravels (USA Today)
  

• FBI chief warns of growing violent ‘domestic terrorism’ threat in the US (AP News)

Finally, Some Good News

• 60 Years Ago He Couldn’t Afford College–Now He’s Donating $20M to Fulfill the Dreams of Students Today (Good News Network)

• This City Created the Largest Free Food Forest in the Country, Where Anyone Can Pick Fruits and Veggies (Good News Network)
  

• Surfer Reunited With His Board By Good Samaritans 400 Miles Away – A Month After it Floated Out to Sea (Good News Network)

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Have a great week. See you next Wednesday!