Sanders Push for $17 Minimum Wage Resurrects Pay Raise Roadblock

Sen. Bernie Sanders (I-Vt.) is prioritizing a bill that would raise the federal minimum wage to $17 per hour, but he’s running into roadblocks inside and outside of the Democratic caucus highlighting the gap lawmakers have struggled to bridge to raise the benchmark over the past decade.

The Health, Education, Labor, and Pensions Committee chairman announced his intentions in May with a planned markup on June 14, but seven weeks later the panel passed a slate of Democratic priorities for labor legislation, including an overhaul to laws governing unionization, but not Sanders’ minimum wage bill.

“You can’t do everything every day,” Sanders told Bloomberg Law when asked why the bill wasn’t included in the mix. “We are going to deal with minimum wage.”

The challenge to clear the legislation in the committee, never mind the full Senate and a Republican-controlled House, shows the difficulty Congress has faced for over a decade to raise the federal minimum wage above $7.25. While there is overwhelming popular consensus that the figure is too low in today’s economy, progressives’ reluctance to settle for a number lower than $15 and conservatives’ unwillingness to go that high has kept low-wage workers in 20 states without a pay raise since 2010.

One major challenge facing Sanders in his pursuit to bump up minimum pay is whether he has the full support of Senate Democrats. Eight senators who caucus with Democrats, including New Hampshire’s Maggie Hassan who sits on the HELP committee, voted against a $15 minimum wage bill’s inclusion in the 2021 Covid-19 rescue package, and there isn’t enough Republican support for the latest effort to reach the 60-vote threshold needed to pass most legislation in the chamber.

While Hassan’s office hasn’t responded to multiple requests for comment, other senators who opposed the previous bill said they’d have to analyze Sanders’ new proposal. Joe Manchin (D-W.Va.) told Bloomberg Law Sanders “knows” he wouldn’t vote for a $17 minimum wage bill.

Bridging (Or Not) the Gap

The $7.25 benchmark has remained the same for 12 years, marking the longest time the federal minimum wage hasn’t seen an increase since it was created in 1938. In the absence of federal action, states have updated minimum pay requirements across the US. Thirty states currently have a base wage higher than the federal rate, and several have raised it above $15 per hour.

But the reluctance by many states, particularly in the South, to raise their minimum wages above the federal mark is part of the argument by advocates to set a higher rate at the national level. Sanders and other advocates said the new $17 figure better represents the needs of low-wage workers in the current economy, particularly after two years of high inflation, and would provide a “living wage” to anyone living anywhere in the country.

The federal minimum wage shouldn’t be a “drive to the bottom to try to figure out where’s the least expensive place to live in,” said Mia Dell, the AFL-CIO’s deputy director of advocacy.

But the new number is facing Republican objection in Congress, with some proposing a lower raise. Sens. Mitt Romney (Utah.) and Tom Cotton (Ark.) introduced a bill last Congress that would raise the minimum wage to $10 per hour over three years.

HELP Committee Ranking Member Sen. Bill Cassidy (R-La.) told Bloomberg Law a proposal similar to the Romney-Cotton legislation could garner enough Republican support to raise the federal benchmark.

“I think that would attract a fair amount of Republicans,” he said.

Some Democrats would also be satisfied with a more modest raise. Manchin floated the idea of raising it to $11 in 2021 during debate over including a federal pay update in the Covid relief package. But the figure might be best around the "$12 range” now, he said.

Lifting the minimum wage to $12 per hour would give just over 8 million workers in the country a raise, according to an Economic Policy Institute model. But progressives may be hesitant about ceding ground on the issue and supporting proposals for a lower raise after years of campaigning on greater increases and confidence that public opinion sides with a more generous bump.

“What we do for a living is actually advocate for workers at the bargaining table, and we don’t bargain against ourselves,” said Dell. “We start with what we think we need, and that’s where we begin the negotiation.”

The Tipped Wage

One other issue lawmakers are considering when discussing the federal minimum wage is the subminimum tipped wage, which allows employers to pay tipped workers a lower rate unless they perform non-tipped work for at least 20% of their hours a week, or for more than 30 minutes straight.

The floor for tipped workers is a top issue for some senators in the Democratic caucus, particularly those from New England, who aren’t in favor of its elimination. Sanders’ previous proposal to establish a $15 minimum wage for all workers would have eliminated the lower rate, currently at $2.13 for tipped workers.

“I never met a server yet that wanted to get rid of the tipped wage,” said Sen. Angus King (I-Maine.), who noted that the maintenance of a tipped wage is just as important as the top number for the minimum wage.

The absence of the minimum wage bill in the June markup session for other labor priorities didn’t surprise some advocates, who theorized it may have been due to the ongoing discussions over the tipped wage.

“I think that’s a sticking point, I think it’s very challenging to overcome that,” said Dell, who highlighted that the union federation wouldn’t support a bill that kept the tipped wage. “We, the AFL-CIO, are committed to one fair wage for all work.”

There may be some room for compromise on the issue, however, said Heidi Shierholz, president of the Economic Policy Institute. While EPI opposes keeping the sub-minimum pay, Shierholz said the phase-in period for the tipped rate to match the minimum wage could be lengthened instead of having the two minimum pay thresholds match within seven years, like in the previous proposal.

“I’m completely fine with just taking time to do it,” she said. “But it should be done.”