US Minimum Wage Hike To Face Tough Tests in Split Senate

The House-approved US$1.9 trillion COVID-19 relief package includes a controversial provision to raise the federal minimum wage to 15 dollars, which is expected to face tough tests in the 50-50 split Senate.

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"As we send this legislation to the Senate, the House will continue our fight for 15, which would give 27 million American workers a raise," House Speaker Nancy Pelosi said, adding that the minimum wage increase is a "financial necessity" for American families, an effective stimulus for the economy and a moral imperative for the country.

The federal minimum wage went up to US$7.25 in 2009 and hasn't been raised in over a decade. Raising the federal minimum wage is one of President Joe Biden's 2020 campaign promises, and has been an important Democratic agenda.

"We know that a US$7.25 federal minimum wage is insane. It is a starvation wage, and we've got to raise it to at least US$15 an hour over the next several years," the Senate Budget Committee chairman said and recalled that "Walmart, the largest employer in America, is owned by the richest family in America... But the company they own starts workers off at US$11 an hour. That is outrageous."

Despite strong support from Democrats, Republican lawmakers have opposed the idea, arguing that it would lead to a loss of jobs, and could hurt vulnerable businesses, especially under a pandemic.

On Thursday, the nonpartisan Senate parliamentarian ruled that an increase to the federal minimum wage violates the budget reconciliation process, which only needs a simple majority in the Senate, and cannot be included in the COVID-19 relief bill.

The parliamentarian's ruling was welcomed by Republicans, who have criticized the Democrats' use of budget reconciliation to push through the US$1.9 trillion relief bill in Congress.

"Very pleased the Senate Parliamentarian has ruled that a minimum wage increase is an inappropriate policy change in reconciliation," Senate Budget Committee ranking member Lindsey Graham said, adding that "this decision reinforces reconciliation cannot be used as a vehicle to pass major legislative change -- by either party -- on a simple majority vote."

The ruling, meanwhile, prompted a backlash.

"It turns out that an unelected person who is called the parliamentarian of the Senate can determine whether the minimum wage provision was germane to the overall bill," Sanders said, adding that he "strongly" disagrees with the parliamentarian's ruling.

"In the coming days, I will be working with my colleagues in the Senate to move forward with an amendment to take tax deductions away from large, profitable corporations that don't pay workers at least US$15 an hour and to provide small businesses with the incentives they need to raise wages," Sanders said.

"That amendment must be included in this reconciliation bill," he added.

Ron Wyden, who chairs the Senate Finance Committee, also said Friday that he is exploring a tax penalty for mega-corporations that refuse to pay a living wage. "This isn't over," he said.

Vice President Kamala Harris, as the president of the Senate, could overrule the parliamentarian's decision, but Brian Deese, director of the White House National Economic Council said that the vice president isn't going to weigh in on the decision.