What’s stopping Congress from raising the minimum wage
The minimum wage has been stuck at the same level since 2009. Minimum wage increases are overwhelmingly popular with voters, including Republicans, and a higher minimum wage reduces poverty and inequality, stimulates economic growth, and has little to no downside for employment. With Democrats in control of the White House and Congress a minimum wage hike seemed almost inevitable, but despite all the upsides of an increase, Congress still hasn’t given workers a raise.
That’s because a seemingly simple and very popular minimum wage increase is always going to be a major uphill fight. Businesses that employ low-wage workers want to keep wages low, and they possess considerable power to shape congressional priorities and, ultimately, policy outcomes. In contrast, ordinary American workers who would benefit from a minimum wage increase exercise little political influence. This power imbalance is why we still have no action on the minimum wage.
In our research we have examined every congressional speech from 1995-2016 — nearly 500 million words — to understand how the power of business and the wealthy shape the issues that get prioritized and neglected in Congress. A number of our findings are relevant to the minimum wage debate. First, the priorities of business and the wealthy generally receive more attention than those of the poor and middle class.
Second, business uses its resource advantage to shift congressional debates toward its priorities. Members of Congress who receive an influx of money from corporations and trade associations are less likely to discuss things like wages or income inequality, and more likely to discuss issues that matter most for the wealthy like the deficit or arcane business concerns like depreciation schedules.
What’s more, members of Congress equate positive economic performance with the goals of business, while ignoring the needs of the ordinary workers and consumers who make our economy work. As former Sen. Phil Gramm (R-Texas) once noted in a congressional floor speech, they think “Wall Street is the foundation on which Main Street is built.”
These forces have sidelined the minimum wage from congressional debate for nearly 15 years (since the 2009 increase was legislated in 2007). Even when the minimum wage does draw some attention, as in recent months, these forces make it easy for corporations to derail policy change, even when an increase may appear inevitable.
Although a $15 minimum wage increase was originally part of the pandemic stimulus bill debated a few months ago, senators unanimously voted to support an amendment stripping the provision from the bill. They argued that a one-time increase to $15 would be bad for small business. While the concern is not unreasonable, a more sincere commitment to raising the minimum wage would have resulted in adjusting the proposal toward a less dramatic increase, not dropping the matter from the agenda entirely.
When Congress enacted the last minimum wage increase in 2007, it required a special aligning of the stars. Unions invested heavily in organizing, lobbying, and campaign contributions to congressional Democrats with the explicit priority of a minimum wage increase, Democrats regained control of both houses of Congress, moderate Republicans felt electoral pressure to show tangible support for a minimum wage bill, and importantly, some segments of the business community saw a minimum wage increase as beneficial (or at least not harmful) to their bottom line, limiting their opposition.
As a result, members of Congress — Republicans as well as Democrats — who saw their support from organized labor increase over this period turned their attention to the minimum wage and put pressure on party leaders to bring it to a vote. Even with all these conditions in place, legislating a minimum wage increase floundered multiple times, and passage ultimately required attaching the provision to a larger Iraq funding bill, which President Bush was eager to sign.
Perhaps the stars are aligned again. Indeed, in some ways the circumstances for a minimum wage increase are better since Democrats now control the White House in addition to Congress and President Biden made the minimum wage a visible part of his campaign. Furthermore, as in 2007, there are divisions in the business community over a minimum wage increase — a number of large companies have made a show of announcing that their lowest wage would be $15 per hour. Organized small business remains adamantly opposed to a $15 minimum wage, but the division within the business community as a whole makes it harder for members of Congress to automatically take “the” business perspective or side with business against workers.
There is a small window for increasing the minimum wage, but this window is closing fast. If Republicans gain control of even one chamber of Congress following the 2022 elections, business opponents of minimum wage increases will easily take advantage of this veto point to prevent American workers from getting a much-needed raise.
Christopher Witko is professor of public policy and political science and associate director of the School of Public Policy at Pennsylvania State University. Jana Morgan is professor of political science at the University of Tennessee. They are co-authors of the book “Hijacking the Agenda: Economic Power and Political Influence.”