Republican Senators Unveil $10 Minimum Wage Plan To Counter Democrats' $15 An Hour Proposal - Forbes

Topline

Senators Tom Cotton (R-Ark.) and Mitt Romney (R-Utah) on Tuesday released a proposal to increase the minimum wage to $10 an hour, countering Democrats' loftier proposal that's unlikely to pass in the Senate without stronger support.

Key Facts

Dubbed the Higher Wages for American Workers Act, the bill would gradually raise the federal minimum wage to $10, from its current level of $7.25, by 2025 and then index the wage to inflation every two years.

Unlike Democrats' proposal, the bill would allow businesses with fewer than 20 employees two extra years to meet the minimum, and in even starker contrast, it would mandate that all employers check the legal status of workers through the Department of Homeland Security's E-Verify system.

The proposed increase would impact about a dozen states that aren't set to have a minimum wage of at least $10 by 2025.

The move comes as Democrats await a decision from a key Senate advisor as soon as Wednesday about whether their $15-an-hour proposal can be included as part of President Joe Biden's $1.9 trillion stimulus plan.

Critics say the minimum wage increase doesn't satisfy the Byrd Rule, which dictates that any provision passed under reconciliation (the process Democrats are using to bypass Republican support in the next stimulus package) must be related in some way to the federal budget.

Senate Budget Committee Chair Bernie Sanders (I-Vt.) said Saturday that existing precedent makes him "confident" the parliamentarian will decide the proposal satisfies the rule, but the $15 minimum wage faces opposition from at least two of the most conservative Democrats, whose votes would be necessary to pass the proposal.

Crucial Quote

“American workers today compete against millions of illegal immigrants for too few jobs with wages that are too low—that’s unfair," Cotton said Tuesday. "Ending the black market for illegal labor will open up jobs for Americans. Raising the minimum wage will allow Americans filling those jobs to better support their families. Our bill does both."

Tangent

It's unclear how much support Cotton and Romney's proposal can garner, but it's unlikely to become law given Democrats' razor-thin lead in the Senate. It could, however, serve as a starting point for negotiations if the $15 wage fails to pass.

Key Background

The evenly split Senate means all 50 Democrats will need to be on board in order for the relief bill to pass with a tie-breaking vote from Vice President Kamala Harris, but Democrats don’t yet have that support. Sen. Joe Manchin (D-W.V.) says he supports an $11 minimum wage, and he’s not alone in opposition. “The minimum wage provision is not appropriate for the reconciliation process," Sen. Krysten Sinema (D-Ariz.) said earlier this month, fueling doubts that a stimulus bill can pass with the proposed minimum wage increase. "It is not a budget item. And it shouldn’t be in there.”

What To Watch For

Majority Leader Chuck Schumer (D-N.Y.) said Friday he expects Biden will sign another round of relief before March 14, when enhanced federal unemployment benefits granted under the last relief bill in December are set to expire.