Minimum wage resolution postponed: Biden's Democrats are taking a risk

Thursday, March 4th, 2021

Minimum wage resolution postponed
Biden's Democrats are taking a risk

From Roland Peters

The left wing in the Senate loses the first substantive power struggle among the US Democrats. The minimum wage increase for millions of workers is missing from the economic stimulus package. Before that, Biden sends a signal to workers and unions.

The Democrats have majorities in both chambers of Congress, Joe Biden sits in the White House – but they are now putting the first big election promise on the back burner at the first opportunity. Initially, the minimum wage will not be increased. Instead, the Democrats are removing it from the $ 1.9 trillion pandemic stimulus package that is about to be voted on in the U.S. Senate. The increase would be urgently needed to bring wages at least closer to real life in the United States.

According to the project, the mandatory minimum wage should rise gradually from the current $ 7.25 to $ 15 over the next five years. With that the Democrats had campaigned, Biden also won the presidency because of a large majority among lower income groups and especially blacks. In the Senate by-election in Georgia, the two Democratic candidates expelled the Republican incumbents with these announcements, giving their party a slim majority in the Senate. The overwhelming majority of Georgia Democratic voters were black.

The applicable national minimum wage has been in force since 2009. Lower income groups in particular would thereby improve their living conditions. According to official figures, no ethnic group in the US earns less than blacks or African-Americans. The median household income is more than a third below that of whites. The minimum wage increase would help 31 percent of all black workers and 32 million Americans in total, the think tank Economy Policy Institute analyzes. Activists even assume up to 40 percent of all black workers and a total of 62 million Americans.

Even $ 15 too little

But for the stimulus package to end up in the White House for signature, the Democrats need all votes plus Vice President Kamala Harris as Senate President. Resistance to this came not only from opposition Republicans, but also from two Democratic senators: Joe Manchin from West Virginia and Kyrsten Sinema from Arizona. Both had announced that they would not vote for the package if it contained the minimum wage increase.

Activists near Congress in Washington – the fight for the increase there has been postponed.

(Photo: AP)

The two are considered moderate. Manchin in particular has to think of conservative voters, his state is ruled by Republicans. Most of them think $ 15 is too high, according to surveys. But using data from the US Department of Labor and the Massachusetts Institute for Technology, it can be calculated that even an hourly wage of $ 15 would be enough for a single person to subsist in only half of the states. In the now postponed project, the minimum wage should also be linked to the median income from 2025.

In their rejection, the two senators also invoked a rule according to which only budget and tax projects can be passed by a simple majority in the Senate. Because of the "Byrd Rule", the two parties often put together different legislative proposals and allow them to be voted on in a package. The recommendation of the official advisor responsible for this is now: The minimum wage does not belong in the current bundle. Such recommendations are not binding, the Democrats could still have pushed it through with their own votes.

After it became clear that this would not happen, there were alternative proposals, such as adding tax to large companies if they were to pay their workers less than $ 15 an hour. But this proposal, too, is now off the table. Leading Democrats say time is short. Unemployment benefits expire on March 14th, new weekly additional payments and a one-off payment by check should help.

Not without risk

The progressive wing now doubts that Biden really wants the minimum wage and tried everything to convince Manchin and Sinema. Because for the Democrats, the postponement also carries a risk of losing voters again. A majority of around 60 percent of them are in favor of a gradual increase in the minimum wage in surveys. Should the Democrats water down the project or even bury it, they could be rid of their congressional majorities after the mid-term elections next year.

Biden is also seen as a friend of unions who advocate workers' rights and higher wages. And while the Democrats have been discussing the minimum wage and political motivations of the actors in the past few days, Biden posted a video message: "Workers in Alabama and across America vote on unions in the workplace," he says: "It is a very important decision which should be taken without intimidation or threats from the employer. "

In Birmingham, the largest city in the southern state of Alabama, there is currently a postal vote among the almost 6000 workers in the warehouse of the mail order company Amazon. It would be the first company location in the USA where a union would be represented and would thus have a signal effect. The vast majority of workers there are black. Amazon grew tremendously during the pandemic and is now the largest employer in the United States. The organizers of the vote report constant intimidation attempts by the company against the workers.

For the most part, previous presidents stayed out of such decisions. Biden's unusual message could also be a message of self-help: Even if we are not pushing through the minimum wage at the moment, you can try to help yourself.