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Blog: Senate Republicans Block the Minimum Wage Bill

May 02, 2014 | By Carolyn Burstein, NETWORK Communications Fellow

On April 30, Senate Democrats were unable to advance the Minimum Wage Fairness Act (sometimes referred to as the Harkin/Miller bill), which would raise the federal minimum wage from the current $7.25 an hour in three increments to $10.10 an hour by 2016. The vote in the Senate failed by 54-42 to clear the filibuster threshold. In addition to tying the wage floor to an inflation index, the bill would also raise the so-called “tipped” minimum wage for restaurant servers and other tipped workers to 70% of the standard minimum wage. The “tipped” minimum wage is now $2.13 per hour before tips and hasn’t been raised since 1991. Even if the measure garners the necessary 60 votes, it still faces nearly impossible odds in the GOP-controlled House, where Republicans have shown no interest in bringing it to the floor and the Speaker, John Boehner (R-OH) has been adamant in his refusal to even consider a minimum wage bill.

Senator Susan Collins (R-ME) has been promoting a bipartisan proposal that would increase the minimum wage to just $9.00 over the same time frame, hoping to rally a coalition around this deal. But Senate Majority Leader Harry Reid (D-NV) wants all Democrats to strongly support the Harkin bill, which he plans to offer again (if not several times) in subsequent sessions before the fall midterm elections.

In fact, a minimum wage of about $9 an hour would only amount to a wage of $18,720 annually, below the current poverty-line threshold of $19,790 for a family of three. The May 1 issue of The Hill quoted Reid as saying, "We are not going to compromise on locking people into poverty."

Discussion on the measure, both inside and outside Congress, has fallen along rather familiar ideological lines. Democrats point out how the wages of minimum-wage workers have eroded over the past 40 years, and argue that if fully phased in by 2016, the new minimum wage would push a family of two or three above the federal poverty line – something that has not happened since 1979. Republicans' resistance was predictable. They argued that a wage hike would lead to a loss of employment for millions of workers, relying extensively on a February 2014 report by the Congressional Budget Office (CBO) that estimated that a $10.10 minimum wage would lead to the loss of somewhere between zero and one million jobs. (The Republicans chose to use the figure 500,000.)

Various analyses of the CBO report (the subject of an earlier blog) clarified that job losses due to raising the minimum wage would be negligible. More than 600 economists, including several Nobel Prize winners, at that time endorsed a $10.10 minimum wage, agreeing that raising the wage to that level would have no effect on employment. More importantly, the CBO report also envisioned higher income for 16.5 million low-earning workers.

Minimum wage legislation is opposed by some business groups (not all), none more vociferously than the businesses represented by the National Restaurant Association. Interestingly, the association had hundreds of members lobbying Congress this week on several issues, including opposition to a higher minimum wage. According to the Bureau of Labor Statistics, about two-thirds of the 3.3 million people who earned $7.25 an hour or less last year worked in food preparation and serving.

The restaurant industry and other low-wage businesses double-fleece taxpayers by opposing the minimum wage and allowing taxpayers to spend about $7 billion a year in federal assistance payments to close the gap between what minimum wage workers are paid and what they need to meet their most basic expenses. Taxpayers also subsidize the outsize salaries of the CEOs of low-wage employees -- to the tune of $232 million in 2012 and 2013 for just the top 20 restaurant chains. These CEOs earn, on average, more than 1000 times the salary of an average fast-food worker.

Let’s take a look at the views of various other groups regarding the minimum wage.

First, the general public. A New York Times/CBS poll and a Huffington Post/YouGov poll, conducted in January and February 2014, respectively, are remarkably similar in their findings. Both indicate that a minimum wage hike to $10.10 is highly popular, with 62% of Americans supporting the raise and only 26% opposed. The Huffington Post/YouGov poll sliced the responses further to indicate that 85% of Democrats and 60% of Independents think the minimum wage should be increased, while only 31% of Republicans agree. There is no doubt that a gulf exists between the two major parties on the matter of economic fairness. Starkly different views have become more and more common.

To most Democrats, many Independents and a few Republicans, “fragile” is the most apt descriptor of the finances for many working families. Even with a steady paycheck, keeping the bills paid can be overwhelming, and saving has become almost impossible for many. Not only are ordinary goods and services continuing to rise in price, but costs for many of those most critical to escaping poverty – education, healthcare and child care – have soared. The latter costs have served as a strong check on social mobility.

Those agreeing with Rep. Paul Ryan (R-WI) that safety-net programs like unemployment insurance, SNAP (food stamps) and WIC are not as effective as economic growth in halting poverty, need to note that decades of economic growth have been completely unsuccessful in raising the incomes from work of many middle, lower-middle, and low-income families.

The National Urban League, the NAACP, BET networks and the National Council of La Raza strongly support raising the minimum wage largely because such legislation would increase the total combined wages of people of color by $16.1 billion. A Center for American Progress (CAP) report concluded that six million workers would be lifted out of poverty if the minimum wage were raised to $10.10, and 60% of them would be people of color. Blacks, Latinos and Asians, who constitute a larger share of minimum wage workers than their share of the overall workforce, would benefit significantly.  

The Center for American Progress reminds us of some significant statistics related to the minimum wage:

  • Earnings for the top 1% have risen 177% since 1980, but minimum-wage workers are actually making 16% less than in 1980.
  • Two-thirds of all minimum-wage workers are women.
  • 21 million children live in households where at least one parent is a minimum-wage worker.
  • 3.5 million people of color make up a disproportionate number of minimum-wage workers.
  • 21 states and many localities have already raised their minimum wage to levels above the federal minimum of $7.25, most of them tired of waiting for Congress to act.

After the Minimum Wage Fairness Act was blocked in the Senate, the Service Employees International Union (SEIU) also reminded us that the minimum wage has fallen far behind inflation even though productivity has risen, and workers are not sharing in the benefits of their labor because corporations are hoarding profits. Company managers, directors and high-level employees seem to be the only beneficiaries of rising profits.

The National Employment Law Project (NELP) expressed its disappointment with the outcome of the 54-42 vote by lamenting that the minimum wage has lost more than 30% of its spending power over the last 40 years. And the Economic Policy Institute (EPI) stated that raising the federal minimum wage would boost GDP by nearly $33 billion and generate 140,000 new jobs over three years as workers spend their raises in their local businesses and communities.

More than 350 clergy members of various faiths signed a letter to members of the Senate stating that "the dignity of work and the security of the family are non-negotiable moral values" and that "for the minimum wage to be moral and just, it must be a living family wage." They referred to repeated admonitions in Scripture against exploiting and oppressing workers and urged their members to flood their senators with phone calls, emails and letters to increase the minimum wage at the first opportunity.

Many of the signatories of the letter were members of the Catholic clergy. The April 30 edition of the National Catholic Reporter (NCR) calls our attention to the fact that, while Catholic teachings would urge us to press for an increase in the minimum wage, current proposals do not really constitute a just, living wage and thereby becomes a kind of "moral understatement, a mere baby step where giant leaps are in order." A just, living wage would provide enough money to support the family, to put some aside for retirement, and to take care of health needs so that the family in question can live and get ahead. A living wage is at least 20% higher than the proposed minimum wage. Thus, looking at the federal minimum wage, even if increased, through the lens of Catholic social teaching, we know that it is failing to meet the minimum standard of our faith. All the more reason to continue working to raise it.

Catholics in Alliance for the Common Good (CACG) agrees that a minimum wage falls short of a just wage, because it fails to provide the resources for individuals to take care of themselves and form and sustain their families.  Both NCR and CACG refer to the forceful example of Pope Francis speaking out on the issue of economic justice and call on their readers to emulate his example.

NCR is forced to remind us of the cognitive dissonance in the church on this issue of social justice. Many U.S. bishops have honored politicians hostile to increases in the minimum wage. For example, Paul Ryan, whose budget proposals have been condemned by the bishops' conference was, nevertheless, praised by Cardinal Timothy Dolan of New York as an "exemplary public servant.” Ryan has also called raising the minimum wage "bad economics."

There are numerous other examples that could be cited, one of the worst being the $1 million contribution from the Koch brothers accepted by Catholic University for their newly opened business school. Unfortunately, the polarization that is so strong in our politics and society has also seeped into ecclesial life to the detriment of the church's social teaching.

Those of us who are supporters of NETWORK and believe strongly in Catholic social teaching have a lot on our platters to occupy our time, talent and treasure.