The Bare Minimum

The Senate swatted away a potential increase in minimum wage, but that may have made a big mistake.

photo courtesy of Fortune Magazine

The current $7.25 minimum wage in the U.S. has remain unchanged since it was set in 2009.

Claire Majerac, Staff Writer

On February 25th, the Senate Parliamentarian Elizabeth MacDonough rejected a Democratic push to institute a 15 dollar minimum wage increase by the year 2025 to President Biden’s current COVID relief package, called the American Rescue Plan. Unfortunately, the rejection was not due to any logical legislative reasoning.

So, why you did she reject it, you may ask?

A technicality. 

First and foremost, the role of a Parliamentarian in the Senate is to interpret the rules of the chamber in a non-partisan manner, essentially a referee on a Federal level. 

MacDonough nixed the 15 dollar minimum wage due to its failure to meet the “requirements of reconciliation.” Since it did not meet the strict requirements of a reconciliation package, it had to be thrown away. 

Specifically, the minimum wage effort was ditched by the Parliamentarian because it did not meet part of the Byrd Rule, a guideline regarding objections and points of order in the Senate. Republicans challenged the Democrats’ push for a higher minimum wage, alleging that it would have a “merely incidental” impact on the budget. MacDonough, after listening to both sides of the argument, agreed that the attempt to raise the minimum wage was, in fact, a violation of the Byrd Rule.

The possibility of Senate Democrats voting to overrule MacDonough existed. Ironically, her predecessor Robert Dove had been removed from office due to Republican disagreement with his ruling. However, White House Chief of Staff Ron Klain told the New York Times that Vice-President Harris, as the president of the Senate, would not be voting to overrule MacDonough since she had made her decision with “bipartisan respect.”

Democrats across the country are angered by MacDonough’s conclusion. Representative Ro Khanna said on Twitter, “I’m sorry – an unelected Parliamentarian does not get to deprive 32 million Americans the raise they deserve.”

I could not agree more.

An article from Policy Link indicates that raising the minimum wage even by a small margin, to $10.10, for example, would have enormous economic benefits for Americans. According to the article, a rise in the minimum wage would increase the wages of 30 million Americans, lifting roughly six million people out of poverty, including 3.5 million people of color.

The current minimum wage of #7.25 is not enough for workers to live sustainably. In an interview with the New York Times, Senator Bernie Sanders called it a “starvation wage.”

One study from CBS found that even with $15 an hour, a worker would not be able to afford an apartment or any kind of affordable housing in 99% of the United States. It takes around $17.90 an hour to rent a one-bedroom apartment and $22.10 an hour for a two-bedroom apartment.

Those opposed to raising the minimum wage cite the potential for slow economic growth, but a study done by the Economic Policy Institute shows that as a higher minimum wage is phased in, the country’s GDP will increase by nearly $30 billion, resulting in the creation of 140,000 new jobs.

The potential for inflation is another concern that opponents raise. There is no doubt that raising the minimum wage could increase inflation. But according to Fordham Economics Professor Paul McNelis, an increase in inflation may actually be a good thing for our economy. The US economy has had relatively low inflation over the past ten years. A higher minimum wage would raise inflation rates, and in turn, lower the cost of borrowing, leading to a more sustainable economic recovery.

I am hopeful that Democrats and Republicans will work together in the near future to create a plan to raise the minimum wage, as it is clearly a gaping issue in our country today. At its core, the minimum wage reflects how much we value people over the businesses they work for.