Consider This from NPR - Life On Minimum Wage: Why The Federal Debate Continues

Episode Date: February 4, 2021

Raising the minimum wage to $15 an hour is one of President Biden's priorities with the newest COVID-19 relief package. But Republicans say it will hurt small businesses too much and some swing voting Democrats are hesitant too. The history of the minimum wage in the U.S. is tied closely to civil rights. Ellora Derenoncourt, an economist at the University of California, Berkeley, says one theme of the 1963 March on Washington was a call for a higher minimum wage. Many states have a higher minimum wage than the federally mandated $7.25. Arindrajit Dube from the University of Massachusetts, Amherst discusses how those states have fared. In participating regions, you'll also hear a local news segment that will help you make sense of what's going on in your community.Email us at [e-mail] more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

In his first week in office, President Biden listed his priorities for the next COVID-19 relief package. Good afternoon, folks. He talked about unemployment help, direct payments, and a policy change that would last far beyond the pandemic. Our recovery plan also calls for an increase in the minimum wage at at least $15 an hour. Raising the minimum wage. Biden says Americans can't support themselves on the current federal minimum wage of $7.25 an hour. No one in America should work 40 hours a week, making below the poverty line. Republicans in Congress argue that effectively doubling the

minimum wage will put too much of a squeeze on small businesses, causing many of them to close. Most of the Democrats support Biden's plan. Most, not all. One of the key votes in the Senate joins us right now. Democratic Senator from West Virginia, Joe Manchin. Joe Manchin of West Virginia is a moderate, a swing voter, and arguably the second most powerful Joe in Washington, D.C. The Senate is split 50-50,

which means Democrats can't afford to lose a single vote when it comes to passing this newest relief package. Fox's Brett Baer asked Manchin this week where he stood on the minimum wage. Are you for raising the minimum wage to $15 an hour? Brett, I don't think that's going to make it in because it doesn't fit within. Democrats in Congress are using a process called budget reconciliation to get the relief package approved. And Manchin says a minimum wage hike doesn't belong in that process. It has to be within the budget lines. That does not come within that at all. And it really needs to be debated. It doesn't work in many ways.

Consider this as the minimum wage debate hangs in the balance, so do the livelihoods of many Americans. From NPR, I'm Adi Cornish. It's Thursday, February 4th. This message comes from NPR's sponsor, BYU Radio, with the podcast Top of Mind. Each weekday, journalist Julie Rose asks the experts what you need to know so you can have the facts free from commentary or speculation. Top of Mind is available wherever you get your podcasts. This message comes from NPR sponsor Dispatch Coffee. Sourcing, roasting, and delivering quality and traceable coffee at a fair price. Try their flexible monthly subscription. Shipping is free.

Go to dispatchcoffee.ca slash consider to get 50% off your first order. We are still in the middle of this pandemic. And right now, having science news you can trust from variants to vaccines is essential. NPR Shortwave has your back. About 10 minutes every weekday, listen and subscribe to Shortwave, the daily science podcast from NPR. It's Consider This from NPR. The federal minimum wage has been set at $7.25 for more than a decade. And while the cost of living has gone up, that number has not. All labor has dignity. Whether you work at McDonald's, you're a janitor, or you work at the White House, all labor has dignity and should be treated with such. Terrence Wise works at McDonald's in Kansas City, Missouri. As a department manager, he earns $14 an hour, and he says that's still

not enough to get by. I know so many folks come to my job and they see me smile at McDonald's and I'm happy, but they don't know that I haven't seen a doctor in 18 years. I don't have dental insurance. I've never had a paid vacation or anything of that nature. Wise has worked in fast food for almost 20 years. He's also a leader in the Fight for 15 movement, as in the $15 minimum wage that's currently on President Biden's agenda. I live right in the Midwest, Kansas City. When you put in a living wage calculator here for my city, my zip code, a single family, you know, two parents, one child,

living wage here in Kansas City is $23 an hour. Wise isn't even close to that number. And for many months, he hasn't been close to covering his bills. Not for the first time, Wise was recently served an eviction notice. When the sheriff knocked on the door for evicting, to evict my family, it wasn't me. It was my kids that answered the door. Hannah Adwa also knows what it's like to pull long hours and still come up short. I would like open Whole Foods and then I would close REI.

So in the same day, I was working literally from 6 a.m. until like 10 p.m. Adwa graduated from Oregon State University in 2016. She took two jobs after graduating, one at Whole Foods, the other at sporting goods retailer REI. At both jobs, she made under $12 an hour, and even working overtime, it wasn't enough to cover her monthly expenses. You can't afford to buy in bulk. If you're a dollar short on your credit card payment, they don't care. You still get charged a fee for being late. So it's like more expensive to be poor. The demand for a federal wage floor first got traction during the Great Depression, when Franklin Roosevelt was reshaping the economy with his New Deal. But a compromise with Southern Democrats left out many Black workers by

excluding industries like agriculture and retail from the new minimum wage. Later, the cause was taken up by the Civil Rights Movement and was a major theme of the March on Washington in 1963. It was called the March on Washington for Jobs and Freedom. Elora Durenancourt is an economist at the University of California, Berkeley. A big focus of the key organizers of that march, A. Philip Randolph and Bayard Rustin, was actually the economic rights of Black Americans, which they also viewed as lagging behind. We demand that there be an increase in the national minimum wage so that men may live in dignity. They were asking for a $2 minimum wage at the time,

which would be more than $15 now with inflation. They didn't get the amount they wanted, but in 1966 Lyndon Johnson signed the Fair Labor Standards Act, which expanded the minimum wage to industries that were previously left out, like agriculture, retail services, hospitals and schools. We have included more than nine million new workers under a higher minimum wage. First of all, Black workers were overrepresented in the newly covered sectors. A result of the law was that the wages of workers in these newly covered sectors improved substantially,

and the improvements were twice as large for black workers as they were for white. The expansion of minimum wage coverage alone explains about a fifth of the reduction in racial inequality in the post-civil rights era. The last time the federal minimum wage was raised was 2009. Can you give us a picture of who makes the federal minimum wage in the U.S. today? As of 2019, about 2% of workers were paid the prevailing federal minimum wage of $7.25 an hour. The law that's being proposed today in terms of its impacts on workers and which workers has a lot of echoes with the expansion of minimum wage coverage in the 1960s. The increase in the minimum wage would disproportionately benefit black workers. We think

that that could reduce racial inequality today, which is still at very high levels. You mentioned that the minimum wage they were calling for at the March on Washington, that's equivalent of more than $15 an hour today. What does that say to you? It tells me that it's an evergreen demand in some sense, but also that both policy and the institutions that represent workers or that increase the bargaining power of workers have been on the decline. Elora Derenencourt, economist and professor at the University of California, Berkeley. What we've been talking about so far is a federal minimum wage, a countrywide mandate. But states have the power to raise their own minimum wages. And when it comes to the number of the moment $15 an hour,

some states are already working towards that. So we have our own little taqueria. We also have a bakery and a meat department, carniceria. Arturo Lopez manages a small chain of markets in South Florida. On the weekends, we do offer a variety of food, carnitas and barbacoa, which is a type of... Last November, Florida voters approved a minimum wage of $15 per hour, which will increase over time. Lopez is not a fan. I believe raising the minimum wage, I don't want to just come out and say it, but I just will. I believe it is a huge mistake. He dreads want to just come out and say it, but I just will. I believe it is a huge mistake. He dreads having to lay off employees. Our workers, we treat them like family. And so

that would completely be our last option to lay them off. It would be very difficult. But then, of course, raising prices and everything, customers tend to see that a lot. And of course, they're always going to go to the more cheaper locations. In 2019, the nonpartisan Congressional Budget Office found that 1.3 million jobs would be lost if the minimum wage were raised to $15 an hour. But many high profile economists have taken issue with that number, including Aaron Dubé. So it's really important to understand that CBO's estimates suggested that while they expected some job loss, the wage gains would be substantially larger. As a result, you would have fewer people in poverty.

Dubé is a professor at the University of Massachusetts at Amherst, where he studies the economic effects of the minimum wage. And I asked him how things are going in states that have already seen an increase. We have a number of states in the country now, California, Massachusetts, where I am, where the minimum wages have risen substantially over the past five years. At the same time, at least prior to the pandemic, we saw employers continuing to hire and continuing to do well and wages continuing to rise, including in low-wage sectors like restaurants. And the reason for that is employers have a number of different ways of adjusting when

the minimum wage rises. One of them is passing it on as price increases to consumers. Maybe the burger costs 50 cents more and middle and higher income consumers end up helping pay for higher wages at the bottom. Another possible way of responding is that employers see reductions in turnover. And turnover is costly for businesses because you have to retrain and recruit workers. As these jobs become better, you end up seeing workers stick around longer.

And that also helps defray some of the costs. You mentioned California and Massachusetts. And that leads me to the question about whether a one-size-fits-all approach is the right way to go, meaning $15 may go further in a place like Amarillo, Texas or Casper, Wyoming, compared to Washington, D.C. or Los Angeles. As a practical matter in this country, we have a lot of variation in minimum wages.

The role of the federal minimum wage, in my view, is to provide a floor. So to make sure that even places where minimum wage policies have not been passed, even though they're quite popular among voters in those states, there is a base. The last time it was changed was what, 2009? Which was another time following a financial crisis. But how is this moment different? And do you think that'll make a difference in sort of whether or not we see a change this time around? So I think the pandemic has certainly highlighted how much at risk essential workers and supermarkets and low paid sectors generally in retail have been. They have suffered a lot and there hasn't really been consistent hazard pay. So I think those are really important things

to keep in mind. At the same time, again, I think we need to be thinking more medium and long term. No one is suggesting that we raise the minimum wage all the way to 15 immediately, or certainly most people are not. And so thinking about where do we want to be four or five years from now? And do we want to have a 725 federal minimum wage, I think is sort of the starting point. And I think it would be a shame if we were not able to raise the federal minimum wage four or five years from now. That's Erin Dubé, professor at the University of Massachusetts at Amherst. You're listening to Consider This from NPR. I'm Adi Cornish.