Will Biden's $15 Minimum Wage Proposal Survive?
Even President Biden doesn't think his proposed minimum wage increase will reach the finish line.
Even though President Biden included it in his $1.9 trillion economic stimulus plan, don't expect a $15 federal minimum wage anytime soon. The current federal minimum wage is $7.25 per hour, so Biden's proposal would more than double that amount. But even the president thinks his minimum wage proposal will end up on the cutting room floor. "I put it in, but I don't think it's going to survive," he told CBS News.
In addition to Republican opposition, there has also been push-back on a $15 minimum wage from more conservative Democrats – most notably, Sen. Joe Manchin (D-W.Va.), whose influence has skyrocketed now that the Senate is split 50-50 between Republicans and Democrats. Manchin has made it very clear that he doesn't support the proposed minimum wage increase, and his vote will most likely be needed to pass any new economic stimulus bill.
There are also questions about whether a minimum wage increase can be included in a reconciliation bill. Reconciliation is a procedural device that Democrats appear ready to use to allow a stimulus bill to pass in the Senate with a simple majority vote instead of the usual 60 votes needed to avoid a filibuster. However, according to a summary of the reconciliation process from the House Committee on the Budget, "[o]nly policies that change spending or revenues can be included" in a reconciliation bill.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
On the surface, a minimum wage increase doesn't appear to meet that standard. But Sen. Bernie Sanders (I-Vt.), chairman of the Senate Budget Committee, isn't giving up. "We have a roomful of lawyers working as hard as we can to make the case to the parliamentarian that in fact raising the minimum wage will have significant budget implications and in fact should be consistent with reconciliation rules," Sanders told CNN. He faces an uphill battle getting a minimum wage increase in the reconciliation bill, though.
But that doesn't mean we won't see a push to increase the minimum wage down the road. President Biden said he would fight for separate legislation to increase the minimum wage after his stimulus package is enacted. The president has also taken executive action directing the Office of Personnel Management to come up with recommendations for promoting a $15-per-hour minimum wage for federal government employees.
Finally, don't forget that states can have their own minimum wage. They can be higher than the federal amount, but not lower. So, even though efforts to increase the federal minimum wage may fail, workers in some states could see a pay raise in the near future if their state increases its minimum wage.
[Stay on top of all the new stimulus bill developments – Sign up for the Kiplinger Today E-Newsletter. It's FREE!]
Rocky Mengle was a Senior Tax Editor for Kiplinger from October 2018 to January 2023 with more than 20 years of experience covering federal and state tax developments. Before coming to Kiplinger, Rocky worked for Wolters Kluwer Tax & Accounting, and Kleinrock Publishing, where he provided breaking news and guidance for CPAs, tax attorneys, and other tax professionals. He has also been quoted as an expert by USA Today, Forbes, U.S. News & World Report, Reuters, Accounting Today, and other media outlets. Rocky holds a law degree from the University of Connecticut and a B.A. in History from Salisbury University.
-
Instant EV Tax Rebates Are a Hit: $580M Paid This Year
EV Credits Claiming federal electric vehicle tax credits at the point of sale is a new and popular option in 2024.
By Kelley R. Taylor Published
-
Seven Steps Couples Should Take Before Blending Their Finances
Getting on the same page now can ensure you remain successful throughout your relationship.
By Kiplinger Advisor Collective Published
-
403(b) Contribution Limits for 2024
retirement plans Teachers and nonprofit workers can contribute more to a 403(b) retirement plan in 2024 than they could in 2023.
By Jackie Stewart Published
-
Roth IRA Contribution Limits for 2024
Roth IRAs Roth IRA contribution limits have gone up for 2024. Here's what you need to know.
By Jackie Stewart Published
-
Four Tips for Renting Out Your Home on Airbnb
real estate Here's what you should know before listing your home on Airbnb.
By Miriam Cross Published
-
Five Ways to a Cheap Last-Minute Vacation
Travel Procrastinator? No matter. You can pull off a fun and memorable getaway on a moment's notice — without breaking the bank.
By Vaishali Varu Last updated
-
How Much Life Insurance Do You Need?
insurance Instead of relying on rules of thumb, you’re better off taking a systematic approach to figuring your life-insurance needs.
By Kimberly Lankford Published
-
When Is Amazon Prime Day?
Amazon Prime In 2023 Amazon had two Prime Day events — one in July and another, called Big Deal Days, in October. We expect 2024 to follow the same schedule.
By Bob Niedt Last updated
-
How to Shop for Life Insurance in 3 Easy Steps
insurance Shopping for life insurance? You may be able to estimate how much you need online, but that's just the start of your search.
By Kaitlin Pitsker Published
-
5 Ways to Shop for a Low Mortgage Rate
Becoming a Homeowner Rates are high this year, but you can still find an affordable loan.
By Daniel Bortz Published