Congressional Democrats hope to seize momentum from states as they push to raise the minimum wage for the first time in four years.
The proposal to increase the federal minimum wage from $7.25 an hour to $9 an hour was a surprise policy addition to President Barack Obama’s State of the Union address in February, and Republicans in Congress generally see it as dead on arrival.
But supporters of the proposal note that 18 states have now set wage floors higher than the current national minimum wage and 10 states require cost-of-living adjustments: Arizona, Colorado, Florida, Missouri, Montana, Nevada, Ohio, Oregon, Vermont and Washington.
Key Democrats say the action at the state level is an important element in the political dynamic around the minimum wage, helping their effort by signaling the popular support for an increase. New Jersey voters, for example, will consider a proposal to raise and index state minimum wage in November — a model some Democrats want to follow at the national level.
Health, Education, Labor and Pensions Chairman Tom Harkin, D-Iowa, a longtime champion of higher wages, says the issue likely will simmer until the 2014 campaign season. “States are ahead of us,” Harkin said. “There may be a disagreement over how much, but people realize we’ve got to do it.”
Obama and other party leaders will use the 75th anniversary of the enactment of the Depression-era law setting a wage benchmark on June 25 to rally support for their push to raise the minimum wage.
Obama’s proposal would raise the minimum wage in two steps and would mandate annual indexing for inflation. Some Democrats, including Harkin, have gone beyond the president’s plan, endorsing an increase to $10.10 within three years, before automatic increases begin.
In his fiscal 2014 blueprint in April, Obama made clear such increases were vital to his vision. Annual increases would boost the wage scale — and even taxes — for all workers. “We have to get wages and incomes rising,” Obama said.
In response, top Republicans such as Speaker John A. Boehner of Ohio point to the continuing tepid economic growth and the 7.6 percent unemployment rate, arguing that increasing the wage minimum would discourage employers from hiring and tamp down economic expansion. Republicans favor alternatives to spur growth and hiring such as business tax breaks and streamlined job-training programs.
They contend that annual wage hikes would be layered atop employer premiums — or penalties — that are mandated next year under the health care overhaul (PL 111-148, 111-152).
“Another increase in the cost of doing business would only damage the opportunity for people to find jobs in this economy,” said Jerry Moran of Kansas, chairman of the National Republican Senatorial Committee.
With those concerns in mind, House Republicans on March 25 defeated, 184-233, a Democratic procedural motion aimed at raising the minimum wage. Six centrist Democrats joined Republicans to block the measure.
Harkin and other supporters are hoping to move legislation in the Senate first, then push for House action. Sen. Mark Begich of Alaska, chairman of the Democratic Steering and Outreach Committee, said the issue was a top priority for Majority Leader Harry Reid of Nevada.
“We could see it this fall. And we will see it next year,” Begich said.
In response to GOP critics, supporters point to nine laws enacted to set or raise the minimum wage, including the original law and a three-step increase in 2007 under President George W. Bush. Every president since Franklin D. Roosevelt has signed such a law, except Gerald Ford, Ronald Reagan and Obama.
But some political observers doubt Congress will follow the lead of states on increases or indexing in the 113th Congress.
Ross Baker, a political scientist at Rutgers University, said Obama’s proposal will face heavy pushback from the GOP and business groups, such the U.S. Chamber of Commerce, in a tough political environment. He said the administration could be put on the defensive in part because of problems in debt talks and implementation of the health care mandate.
“I don’t see it happening,” Baker said. “It’s a different dynamic in states. They are referring proposals to voters.”
Mark J. Perry, a scholar at the American Enterprise Institute and economist at the University of Michigan at Flint, said Republicans will have to be cautious when explaining their opposition. A March Gallup poll found 71 percent of respondents backed a $9 minimum wage.
“The pattern is, Republicans generally oppose it during the debate. Then when they know it will pass, they switch and vote in favor of it,” Perry said.
Several undecided Republicans say they will evaluate economic conditions before making a final call. “It’s going to depend on what the economy looks like next year,” said Rep. Peter T. King of New York.
In his State of the Union address, Obama said yearly minimum-wage increases were an idea that he and Republican presidential nominee Mitt Romney “actually agreed on last year.”
Early in the 2012 campaign, Romney renewed his long support for indexing but he later called for holding off in times of high unemployment. Now, many Republicans call for delay and for caps and exemptions to the minimum wage.
Whether lawmakers agree on indexing, Obama and other Democratic leaders will need to work out differences in their own ranks over the size of any minimum-wage increase.
Some centrist Democrats such as Mark Pryor of Arkansas, who is running for re-election next year, complain that pending bills exceed some state mandates. “It’s steep,” Pryor said of Harkin’s proposal.
Critics point out that Washington — with a minimum wage of $9.19 — is the only state to match or exceed Obama’s $9 target. New York adopted a law in April that matches Obama’s goal in two years.
But Harkin so far has rejected calls from colleagues to align behind Obama’s plan. He and Rep. George Miller, D-Calif., have introduced separate plans in the Senate (S 460) and the House (HR 1010), respectively, to push the wage to $10.10. Harkin says a bigger jump is needed to match productivity gains and keep pace with the private sector median hourly wage of $20.32.
While Democrats settle such disputes, Mark Wilson, a former deputy assistant secretary of Labor under George W. Bush, says Republicans are likely to link their opposition to concerns about the health care mandate, unemployment and the potential for “1970s-style cost-push inflation.”
Wilson, who heads Applied Economic Strategies, a consulting firm, says the minimum wage will be a high-profile issue in the 2014 campaign season. “Democrats will get it passed, or they will lose and get the issue,” he said.