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‘The world has changed’: The scrambled new politics of the minimum wage

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WASHINGTON — Bernie Sanders, Josh Hawley and Amazon don’t often find themselves on the same side of an issue.

But years of stagnant wages that have failed to keep up with living costs and the political realignment spurred by Donald Trump are bringing together more than just Sanders, the independent senator from Vermont; Hawley, the Republican senator from Missouri; and Amazon, one of America’s biggest businesses.

The politics of the minimum wage have been scrambled, dividing the business community and making strange bedfellows out of populists on the right and the left.

Progressives were outraged after the White House acquiesced to a Senate parliamentarian’s ruling that a minimum wage increase to $15 an hour could not be included in the Covid-19 relief bill working through Congress. President Joe Biden has promised to try again.

For the first time in years, Democrats may find a receptive audience from major business interests and some Republicans for raising the minimum wage — although not all the way to $15. Even the U.S. Chamber of Commerce, the titan of Washington business lobbying, says the current $7.25 federal minimum is “outdated.”

Holly Sklar, who runs a coalition of hundreds of companies that support a $15 minimum wage called Business for a Fair Minimum Wage, said: “This is 2021. So whatever people thought of $15 in 2012, 2013, 2014 or 2015, a lot of time has gone by. It should look different. The world has changed.”

‘What business do they have?’

Corporate America is in the middle of a reset, not just because of the Democratic takeover of Washington, but also because of sweeping changes that businesses say respond to public outcries about race and justice.

What the left sees as a realignment has prompted some conservative backlash.

At the Conservative Political Action Conference, which was once bastion of pro-businesses libertarianism, a panel last month decried the “The Awokening of Corporate America.” But at the same conference, Trump campaign veteran Steve Cortes argued that a $15 minimum wage should be a key pillar of a future Republican platform, along with “border sovereignty” and “toughness in trade.”

Amazon, which raised its starting wage to $15 an hour, is trying to lead the charge, and it is actively lobbying Congress, having taken out full-page ads in The New York Times supporting the Raise the Wage Act. Target and Best Buy have also set their lowest wages at $15 an hour, while Walmart set its minimum at $11 and Costco’s just jumped to $16.

“We’ve seen the positive impact this has had on our employees, their families, and their communities,” Amazon said in a blog post.

Bipartisan backing is growing, although not necessarily for $15.

At least six Republican senators have come out in favor of raising the wage to $10 an hour or more; Hawley proposed a $15-an-hour wage for companies with revenues of more than $1 billion.

“For decades, the wages of everyday, working Americans have remained stagnant while monopoly corporations have consolidated industry after industry, securing record profits for CEOs and investment bankers,” Hawley, a potential presidential candidate who faced heat after he cheered on Trump supporters outside the Capitol on Jan. 6, said in a statement.

Others on the right see Amazon’s move as self-serving. Critics who point to other parts of Washington that are putting pressure on Amazon, some of it over antitrust concerns and the company’s working conditions, argue that the company could use some goodwill points.

And they say that Amazon doesn’t speak for business but rather that is trying to put its competitors out of business by forcing a cost increase that small businesses couldn’t absorb.

“Is it to ingratiate themselves with the new Biden administration? I have to say yes,” said Alfred Ortiz, the CEO of the Job Creators Network, a conservative small-business network founded by Home Depot co-founder Bernie Marcus. “What business do they have dictating to these small businesses that they should be paying $15 an hour?”

The group recently put up a billboard in Times Square in New York asking: “How does Amazon bulldoze its Main Street competitors without getting dirty?” The answer: “They get Congress to pass a $15 minimum wage.”

Amazon’s move to $15 came only after Sanders introduced a bill in 2018 dubbed the “Stop BEZOS Act,” which would have forced companies like Amazon, founded by Jeff Bezos, to foot the bill for government safety net programs used by employees, like food stamps.

“We listened to our critics, thought hard about what we wanted to do and decided we want to lead,” Bezos said at the time.

Opponents of raising the minimum wage increasingly point to Amazon to portray their fight as one that pits large businesses against small ones, especially as Amazon’s profits soared while small restaurants and mom-and-pop shops were hammered by the pandemic-induced recession.

“If you’re already paying more than $15, then it’s in your best interest to have your competitors pay more than $15, too,” said Jerry Parrish, the chief economist at the Florida Chamber Foundation, the non-profit arm of the Florida Chamber of Commerce, which fought a referendum to raise the state’s minimum wage last year.

‘Strike a deal’

Traditionally, the minimum wage has broken along a simple divide in Washington — business and its Republican allies on one side and labor and its Democratic allies on the other.

But the minimum wage fight is now divided into three camps, none of which neatly conform to expected ideological or business groupings: There are those who support a full $15 minimum wage, those opposed to raising the wage at all and a large group in the middle open to raising the minimum to, say, $10 an hour but not all the way to $15.

The third camp includes centrists in Congress, like Sens. Joe Manchin, D-W.Va., and Mitt Romney, R-Utah, and the mainstream business lobbies, like the Business Roundtable, which represents some of the world’s most powerful CEOs, and the Chamber of Commerce.

The chamber, with its imposing Beaux Arts headquarters across Lafayette Square from the White House, almost exclusively supported Republicans in congressional elections until a shake-up last year as the C-suite grew weary of Trump’s trade wars and unpredictable governance.

Last year, the chamber backed 23 freshman Democrats — including 18 who voted for a $15 minimum wage — and 29 freshman Republicans, compared to just seven Democrats and 191 Republicans in the previous election cycle.

“We’re open to discussion about raising the minimum wage,” said Glenn Spencer, the chamber’s senior vice president of employment policy. “The question is are there enough Democrats who are willing to strike a deal that will result in a minimum wage increase? Or are progressives going to stick with their politically motivated $15 and wind up with zero?”

Polls consistently show that a majority of Americans support raising the minimum wage, including a strong contingent of Republicans. A growing number of major cities and states have set their own wage floors at $15.

Florida voters last year overwhelmingly approved the referendum, voting 61 percent to 39 percent to raise the state’s minimum wage to $15, even as they voted for Trump. And Arkansas, a relatively low-income and deeply conservative state, has set its minimum at $11.

Some business groups and Republicans see the writing on the wall and have rushed to get ahead of the issue.

The National Federation of Independent Business has taken a harder rhetorical line against minimum wage increases than the Chamber of Commerce or the Business Roundtable, for instance, although all have emphasized the need to insulate small businesses.

“Small businesses are far less likely than larger businesses to have cash reserves or profit margins to absorb the increase in labor costs,” National Federation of Independent Business Vice President Kevin Kuhlman wrote in a letter to lawmakers last month.

Democrats have been sensitive to that issue, too. When their minimum wage measure was removed from the Covid-19 relief bill, Sanders floated an idea to impose tax penalties on large companies that pay less than $15 an hour and to offer tax incentives for small businesses that pay more.

The plan was abandoned, and a standalone amendment to raise the wage to $15 failed in the Senate on Friday, with eight Democrats voting against.

With Manchin opposed to $15, Democrats may have to try to find a compromise, much to the chagrin of those on the left.

“I think for Democrats to settle for anything less than $15 is political suicide, given the moment,” said Joseph Geevarghese, who used to run the Fight for $15 campaign and is now the executive director of Our Revolution, a progressive activist group aligned with Sanders.

The negotiations could be the first real test of whether business interests are really interested in turning over a new leaf with the new administration. They might need to exert some pressure on Republican senators to get to the necessary 60 votes.

In the meantime, worker activists like Sara Fearrington, a server at a Waffle House in Durham, North Carolina, say they will keep fighting for a higher wage.

“We’re going to keep striking, we’re going to keep organizing, and we’re going to keep coming to the table until we get it,” she said.


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