Imperfect relief bill should be approved, still

The federal minimum wage of $7.25/hour equals $15,080 annually, and that’s assuming that the worker is able to work 40 hours a week and takes no unpaid sick days or vacation days.

The federal minimum wage has been the subject of much of the wrangling over the latest COVID-19 stimulus bill put forward by President Biden and passed by the House early Saturday.

The relief package would provide a $1,400 payment to many Americans; extend and enhance federal unemployment assistance; expand a child tax credit, send $350 billion in aid to state and local governments; and pour new funding into vaccine distribution, food stamps and schools.

But it appears it will not include hiking the federal minimum wage to $15 an hour as many progressive Democrats are seeking.

The Senate appears ready to move the $1.9 trillion package along without the minimum wage increase, which could intensify divisions among Democrats.

Last week, the Senate’s parliamentarian ruled that mandating a nationwide $15 minimum wage could not be done via budget reconciliation, with a simple 51 votes. That led some Democrats to call for ignoring that ruling, and for others to put forward a tax plan championed by Sen. Bernie Sanders that would in effect penalize large companies that didn’t pay workers $15 an hour.

We don’t favor a one-sizefits-all minimum wage, since it would put rural, poorer states and areas on a par with highcost-of-living areas such as ours.

In California, effective Jan, 1, 2021, the minimum wage increased to $14 per hour for employers with 26 or more employees ($29,120 annually for someone working 40 hours a week at that wage, for 52 weeks) and $13 per hour for employees with 25 or fewer employees. And it will go up another dollar next Jan. 1. and by Jan. 1, 2023, the minimum wage for all employees will be $15.

But while this minimum wage — and it really is a minimum to get by here – may work here, raising the minimum wage to $15 by 2025 would lift 900,000 Americans out of poverty over those four years, according to the Congressional Budget Office. But it would also cost 1.4 million jobs across the country, at a time when employment among lower skilled workers has declined across the country.

Why would it cost jobs? Because the minimum wage is a price and when you make it more expensive to hire workers, many lower skilled employees are priced out of the job market. Moreover, companies have other means to absorb higher labor costs: Raising prices to consumers, moving toward automating jobs, and reducing workers’ hours are a few of the ways.

We think the legislation should move forward without the minimum wage increase, which is what looks like will happen. That doesn’t mean it’s a slam dunk, as Republicans have said the aid package is too broad and are pressing Democrats to wait to see where more funds are needed, after Congress passed nearly $4 trillion in relief efforts since the pandemic began.

Politicians in both parties, however, know the bill is popular, with polls showing that about 70 percent of Americans support the plan, including many Republican voters. In addition, Democrats, with narrow majorities in the House and Senate, will be under a lot of pressure to deliver a victory to the Biden administration, rather than let the relief bill get caught up the same kind of partisan wrangling that most Americans are sick of.

Ultimately, the Senate and House both need to pass identical bills for Biden to sign one.

There’s also a sense of urgency, since some benefits from the earlier stimulus — like expanded jobless benefits — start to expire on March 14.

Going small as the pandemic continues is not the right answer for our times. Get this package passed and soon.