Friday, December 04, 2020

Biden wants to raise federal minimum wage. Trump doesn't. A look at their debate disagreement.

Oct 24. 2020
Biden/File photo
Biden/File photo
Facebook Twitter

By The Washington Post · Eli Rosenberg · NATIONAL, BUSINESS, POLITICS, WHITEHOUSE 

President Donald Trump and former Vice President Joe Biden presented opposing views on raising the minimum wage at the final presidential debate on Thursday.

Biden said he still supported the implementation of a $15 federal minimum wage, even as many small businesses are struggling during the pandemic. The current federal minimum wage is $7.25.

Trump said the issue should be decided by the states.

"He said we have to help our small businesses by raising the minimum wage - that's not helping," Trump said of Biden. "I think it should be a state option. Alabama is different than New York. New York is different from Vermont. Every state is different."

When pressed by the moderator, Trump said that he would consider raising the federal minimum wage if granted a second term, though he did not give specifics.

Biden responded with a defense of the minimum wage, which is a part of his platform for strengthening the hand of workers.

"No one should work one job, be below poverty," he said. "People are making six, seven, eight bucks an hour. These first responders we all clap for as they come down the street because they've allowed us to make it. What's happening? They deserve a minimum wage of $15. Anything below that puts you below the poverty level."

Trump's criticism for raising the federal minimum wage is the culmination of years of waffling on the issue.

As a candidate in 2015 and 2016, Trump said in interviews he was open to raising the federal minimum wage. Other times he said he did not support an increase. Trump and his campaign officials eventually said that he supported raising the minimum wage to $10 an hour.

Last year, he told Spanish-language broadcaster Telemundo that he was "looking at" raising the minimum wage to $15 an hour.

But his answer Thursday marked a departure from some of the populist rhetoric that had helped power his campaign in 2016, political analysts noted.

Public opinion surveys have found broad support among Americans for raising the federal minimum wage to $15 an hour, which works out to about $31,200 a year before taxes - an amount that still puts some below the living wage in many parts of the country, economists say.

Sylvia A. Allegretto, a labor economist at the University of California, Berkeley who has studied the issue of minimum wage for years, said that the pandemic and the discussion about economic relief for businesses and workers should be understood more as an opportunity to address an issue like minimum wage than an impediment. Labor costs were not the reason why so many businesses are struggling at the moment, she noted. 

"They want to say times are bad and we shouldn't do it now, but they weren't clamoring to change this in 2018 or 2019 after ten years of great expansion," she said, of Republicans. "You could use the tax code, you could use economic relief that could be spent on businesses to help them pay their workers now. You could imagine merging these two issues so we come out of this with a fair more balanced economy with more workers not at poverty level wages."

Biden's support of a $15-an-hour minimum wage represents a shift for Democrats. In 2016, Hillary Clinton supported raising the federal minimum to $12, but not $15.

Economists and academics have debated for years about whether raising the minimum wage results in job losses from businesses that would have to cut positions or hours, to make up for the increased cost of labor, in response.

"How are you helping your small businesses when you're forcing wages?" Trump said at the debate. "What's going to happen, and what's been proven to happen, is when you do that, these small businesses fire many of their employees."

Last year, the House passed a bill that would gradually raise the federal minimum wage to $15, but it has languished in the Republican-controlled Senate.

The Congressional Budget Office found that the bill offered mixed results, noting that 1.3 million people would be lifted out of poverty by 2025 and that the provisions could boost wages for some 27 million workers. But the analysis also found that the bill could also result in the loss of 1.3 million jobs.

Many studies have shown that increasing the minimum wage does not lead to significant job loss, while others still have come up with opposite results.

A 2017 study in Seattle, which leads the way with a gradual $15 minimum wage increase that the city passed in 2014, found that average pay declined as employers cut hours after the wages began rising.

But the same group of researchers released another study, the following year, which found that more experienced workers who started out working more hours, ended up earning on average $251 more per quarter. A less-experienced group of workers, who were working fewer hours when the study began, saw little to no change in income from the law.

A broader study in 2018 from Allegretto and two other scholars from the University of California at Berkeley looked at the effect of minimum wage increases on food service workers in six large cities - Seattle, San Francisco, Oakland, San Jose, Chicago and Washington, D.C. - and found that the policies had increased pay for workers and resulted in no significant job loss.

And an analysis in 2019 of more than 130 minimum-wage increases passed since 1979 found that the fall in jobs paying less than the new minimum wage had been offset by the jump in new jobs paying just over it.

Betsey Stevenson, an economist at the University of Michigan and former member of the Council of Economic Advisers from 2013 to 2015, said she agreed that looking at a minimum wage proposal along with targeted relief for struggling small businesses was wise. Lower wage workers, many struggling with higher levels of unemployment and job insecurity due to the pandemic should not have to bear the cost of the pandemic by waiting for more equitable wages, she said. 

"The federal minimum wage is currently set way too low," she said. "We really don't want workers to be bearing the increases of those costs. As a society we should be sharing that."

 

 

Tags:
Facebook Twitter
More in News
Editor’s Picks
wmg-logo
Top News
wmg-logo