Dems Are Divided on Minimum Wage. But That's Not Bad News

Dems Are Divided on Minimum Wage. But That's Not Bad News

Last week, Bernie Sanders and other leaders of the Congressional Progressive Caucus introduced legislation that would raise the federal minimum wage to $15 an hour by 2020. The bill is not only the most ambitious wage hike legislation to come from the left, but it’s also indicative of the growing influence that the national Fight for $15 movement exerts over Washington’s political discourse.

Not all Democrats support such a big increase to the nation’s minimum wage. The $15 proposal notably abandons the mainstream party line that was established a couple of months ago when Senator Patty Murray and Representative Robert Scott introduced a bill to raise the federal minimum wage to $12 an hour. Democratic Senate leaders Harry Reid and Chuck Schumer, along with a number of other prominent Democrats, came out in strong support of the hike.

As late as last week, House Minority Leader Nancy Pelosi had also voiced support for the party line on minimum wage: “With this one act, we could give a raise to more than 25 million working people, lift up to 4.5 million Americans out of poverty and generate some $22 billion in increased economic activity.”

But just yesterday, The Hill reports, Pelosi announced that though it’s not politically possible now, she supports raising the minimum wage to $15. “Twelve dollars may be what can pass, but I’m for $15 per hour,” Pelosi told reporters. Her unexpected move signals the growing populist influence of both the progressive caucus in Congress and the rhetoric surrounding the Fight for $15.

According to The Hill, an economic adviser to Obama said that his current support for a $12 minimum wage is unaltered—though it’s worth noting that throughout his tenure, his minimum wage platform has ballooned from $9, to $10.10, and most recently to $12. As I wrote last week, progressive labor advocates are now pushing Obama to build on his 2014 executive order that raised the minimum wage to $10.10 for federal contract workers and sign a new order that pushes that up to $15.

Hillary Clinton has so far declined to endorse of a national $15 minimum wage, indicating that while she supports such a wage in cities with higher costs of living she doesn’t believe that it can work everywhere. “I support the local efforts that are going on that are making it possible for people working in certain localities to actually earn $15,” Clinton told Buzzfeed News a couple weeks ago.

As former White House economist Jared Bernstein told the New York Times, “There could be quite large shares of workers affected, and research doesn’t have a lot to say about that… [W]e have to be less certain about the outcome.”

Still, there’s a strong body of economic research that shows the economy can sustain modest wage increases—to $12 an hour for instance—spread out over multiple years would create little to no job loss. The thinking behind the $12 minimum wage proposal is that it fully restores the purchasing power of the wage floor back to its peak in the 1960s. The bill also indexes the wage, once raised, to cost-of-living increases, and it would phase out the minimum wage for tipped workers.

And many economists believe we could go further. Last week, a group of 200 economists came out in support of the $15 an hour minimum wage legislation, stating: “We recognize that raising the federal minimum wage to $15 an hour as of 2020 would entail an increase that is significantly above the typical pattern with federal minimum wage increases. Nevertheless, through a well-designed four-year phase-in process, businesses will be able to absorb the cost increases through modest increases in prices and productivity as well as enabling low-wage workers to receive a slightly larger share of businesses’ total revenues.”

Raising the minimum wage at least somewhat is a wildly popular idea for most Americans. According to a January 2014 Pew poll, 73 percent of Americans—including 53 percent of Republicans—supported raising the minimum wage from its current level of $7.25 to $10.10 an hour. 

While the political pathway for a $15 national minimum wage is blocked for now, the proposal gives the $12 minimum wage push greater momentum. “It’s certainly pushing the envelope but it also broadens the terrain of what’s possible. Pushing for $15 makes $12 easier to pass,” says Amy Traub, as senior policy analyst for Demos.