By Megan R. Wilson - 02/13/14 06:00 AM EST
Business groups are taking no chances on a possible minimum wage increase despite the promise from House Republicans to oppose it.
With Senate Majority Leader Harry Reid (D-Nev.) poised to have the upper chamber take a vote on a wage hike by the end of the month, K Street groups are spending millions to make sure the legislation never makes it off the Senate floor.
The legislation from Senate Democrats would gradually raise the federal minimum wage from $7.25 to $10.10 over two years. And in a major shift, it would, for the first time, make subsequent increases automatic by indexing the wage to the rate of inflation.
That inflation provision is lending new urgency to the fight for business groups.
“It’s a nonstarter. Small businesses would have no say because it would pretty much be on autopilot,” said Ashley Fingarson, manager of federal affairs for the National Federation of Independent Business (NFIB). “And then once it’s on autopilot, it wouldn’t matter what else is going on in the economy, the health of the business, or any other factors.”
The economic impact of a minimum wage increase is fiercely debated among economists, who have produced reams of conflicting research on whether it slows growth.
Proponents of a wage hike — such as the AFL-CIO, Service Employees International Union (SEIU) and the United Food & Commercial Workers International — say it would help move people out of poverty and away from public assistance programs.
Opponents say an increase would only backfire on low-wage workers by forcing employers to slash jobs and hours for the estimated 1.5 million hourly workers who made the minimum wage in 2012.
Groups on both sides of the debate have been preparing for a Senate vote since late last year, when at least 35 trade groups, nonprofits, unions and corporations disclosed lobbying on the minimum wage, according to Senate forms.
“[The Senate is] where most of the activity is,” Fingarson said.
The NFIB has been making repeated visits to Capitol Hill, taking along small-business owners armed with studies on how increasing the minimum wage would harm the economy.
“When you’re looking through the lens of the small-business owner, [the proposed minimum wage] is another thing they have to comply with — [it’s] just piling it on,” Fingarson said. “We’re saying, it’s coming on the heels of increased regulation, increased healthcare costs and increased taxes.”
The International Franchise Association, which represents the owners of franchises such as McDonald’s and Dunkin’ Donuts, said it is devoting all of its resources “to make sure that this does not pass the Senate.”
“Our belief is that it won’t be able to get out of the Senate. If that changes, we’ll have to concentrate on the House as well,” said Jay Perron, the vice president of government relations for the group.
Recent political history provides some clues as to why opponents of the wage increase aren’t counting on the House as their last line of defense.
Since the Fair Labor Standards Act created the minimum wage in 1938, every president, with the exception of Ronald Reagan and Gerald Ford, has signed an increase into law.
Further, the increases have occurred an average of every eight years, an analysis by The Hill shows. President George W. Bush singed the last boost to federal wages seven years ago, in 2007.
Plus, House Republicans had vocally opposed raising the minimum wage in 1996 under Speaker Newt Gingrich (R-Ga.) but yielded under election-year pressure.
“There’s a history of these things being done in election years,” said Peter Colavito, the director of government relations at Service
Employees International Union (SEIU). “There’s a sense in the country that we need this — we’re long past when $7.25 was enough to pay the bills for most people.”
But one lobbyist with ties to Republican leadership said the conference isn’t feeling the same amount of pressure it did in 2007, when the increase was included in a bill with war funding and Hurricane Katrina disaster relief.
“The delta between the [increases in] 1996 and 2007 is 11 years,” the lobbyist said on the condition of anonymity in order to speak freely. “You need an extended period of time before Republicans feel any pressure.”
The minimum wage protests being staged across the country “may play a factor, but [they’re] not going to move the needle with members too much,” the lobbyist said.
A Gallup poll from November found 76 percent of people in the United States would support legislation that increased the minimum wage to $9 per hour — a 5 percentage point increase from an identical poll in March. More than half of Republicans surveyed agreed with the increase.
The proposal from congressional Democrats would mandate that wages increase to $8.20 per hour six months after the legislation passes and to $9.15 after one year.
Raising the minimum wage is “not only the right thing to do; it’s the popular thing to do. And those are the two things you need to [show] to win,” Colavito, of the SEIU, said.
Yet, passage of the Senate bill appears unlikely. While Democrats are determined to make the minimum wage a part of their midterm election platform, some members of their own party are balking at the bill. Sen. Mark Pryor (D-Ark.), one of the party’s endangered incumbents, has already said he would vote no.
Faith-based organizations have also increased their lobbying in support of a wage increase, with the Friends Committee on National Legislation (FCNL), a Quaker lobby group, jumping into the debate for the first time.
“We want to create a political problem for members who don’t vote for the bill,” said Tila Neguse, a legislative associate at the organization who works on domestic issues.
“We want those votes to be symbolic; the members who vote ‘no’ on the legislation this time around, we want them to have to answer for that,” she said.