Although the outcome is uncertain, the push for a $15 federal minimum wage continues in Congress. On Monday, the House Education and Labor Committee proposed adding the increased minimum wage to President Biden’s $1.9 trillion coronavirus relief package, known formally as the American Rescue Plan. Just days after the Senate voted to prohibit raising the minimum wage during the pandemic, House Speaker Nancy Pelosi said Thursday that the $15 federal minimum wage will be included in the aid package the House is preparing to push to the Senate. Under this proposal, the minimum wage would increase over several years, going from the current hourly rate of $7.25 to $15 by 2025. Currently, 29 states – including Ohio – and the District of Columbia have minimum wages higher than the federal minimum wage.
$15 Minimum Wage Concerns
According to the nonpartisan Congressional Budget Office, raising the minimum wage could prove to be a double-edge sword; while it is estimated to lift 900,000 people out of poverty, it could also cost up to 1.4 million jobs. Small businesses in particular are concerned about the impact of raising the minimum wage, with a slight majority opposing the measure. According to a recent survey, one third of small business owners say that increasing the minimum wage to $15 an hour would likely force them to lay off workers.
Possible Next Steps for the Minimum Wage Increase
If the minimum wage increase passes through the House of Representatives, then it would be considered in the Senate. If the Senate parliamentarian — who is a civil servant that advises the Senate on its rules and procedures — determines that raising the minimum wage would have a direct impact on the federal budget, then the legislation may be passed through a process known as budget reconciliation. If the legislation can be addressed through budget reconciliation, then it needs only a majority of the votes in the Senate to become law.
Finally, it is unclear if there are enough votes in the Senate to pass raising the federal minimum wage, even through budget reconciliation. Democratic Senators Joe Manchin and Krysten Sinema from West Virginia and Arizona have been critical of raising the minimum wage as part of President Biden’s coronavirus relief plan.
The future of raising the federal minimum wage is in flux and negotiations are still going on in Congress. KJK is monitoring this legislation and assessing how it may impact small businesses. If you have questions about theAmerican Rescue Plan, or the potential $15 federal minimum wage, please contact Rob Gilmore at rsg@kjk.com or 216. 736.7240, Melissa Yasinow at may@kjk.com or 216.736.7205, or any of our Labor & Employment professionals.
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