Educating Kyrsten Sinema On The Minimum Wage

I’ll admit that I have never been a big fan of Kyrsten Sinema. I have always considered her all show and no substance. When it comes to policy chops, she is a lightweight. (But she is in the Democratic Caucus which counts towards giving us nominal control of the U.S. Senate).

But the Republican-biased POLITICO published this puff piece on Kyrsten Sinema this week, The most influential Democrat you never hear from. Oh please.

What does the Republican-biased POLITICO think makes Kyrsten Sinema “Influential”?

Kyrsten Sinema doesn’t often make big policy pronouncements. But when she does, Democrats had better listen.

Take the $15 hourly minimum wage that Democratic leaders want to add to a $1.9 trillion coronavirus relief package. Sinema, who became the first Democrat to win a Senate race in once deep-red Arizona in 30 years, is crystal clear: She’s against including it.

“What’s important is whether or not it’s directly related to short-term Covid relief. And if it’s not, then I am not going to support it in this legislation,” Sinema said in a telephone interview this week. “The minimum wage provision is not appropriate for the reconciliation process. It is not a budget item. [Byrd Rule.] it shouldn’t be in there.”

[S]inema holds views that can be as old-school as any of the Senate’s long-timers’. Not only does she want to keep the filibuster, she wants to rebuild it. And the end-around idea of overruling the parliamentarian to jam whatever Democrats want to in a budget reconciliation bill is not going to happen on Sinema’s watch either.

“There is no instance in which I would overrule a parliamentarian’s decision,” Sinema said. “I want to restore the 60-vote threshold for all elements of the Senate’s work.”

So the Republican-biased POLITICO thinks Kyrsten Sinema is “Influential” because she empowers a tyranny of the GQP minority, led by the malevolent Mitch McConnell, the practitioner of “total obstruction” partisan politics who will use his weapon of mass destruction, the Senate filibuster rule, to totally obstruct President Joe Biden and Democrats’ long overdue policy reforms. So Senator Sinema is for Senate gridlock? Is she certain that she is caucusing with the right team?

Senator Sinema cares more about the Byrd Rule and preserving the Jim Crow era filibuster rule, weaponized by Mitch McConnell to obstruct all business in the Senate, more than millions of Americans living in poverty desperately in need of a pay raise, if not a living wage, especially during this Coronavirus pandemic? You would not be wrong to ask “what the hell is wrong with you?”

Senator Sinema is flat wrong about the Byrd Rule. As CNBC recently reported:

A report released Monday from the nonpartisan Congressional Budget Office concluded that raising the minimum wage to $15 an hour by 2025 could add tens of billions of dollars to the federal budget deficit.

The CBO report showed that the Raise the Wage Act of 2021, which was recently reintroduced in the House, would increase the cumulative budget deficit by $54 billion through 2031. It also said raising the minimum wage to $15 an hour by 2025 would increase net revenue and boost spending on programs such as Medicaid and Medicare while decreasing the cost of others, such as the Supplemental Nutrition Assistance Program, or SNAP.

That could actually help Democrats pass an increase.

The report could help Democrats push forward a federal minimum wage increase because it supports the argument that it could be included in any legislation passed via Senate budget reconciliation, meaning that it impacts outlays and revenue and is not an incidental cost.

“This is not just incidental to the budget [the wage hike], it’s key to the budget,” said William Spriggs, an economics professor at Howard University and chief economist for the AFL-CIO, on a Monday call with reporters. It has clear implications when we think about Medicare and Medicaid, which are two very large federal programs, he said.

Here is a primer on the minimum wage from Dean Baker, the co-director of the Center for Economic and Policy Research (CEPR). If Worker Pay Had Kept Pace With Productivity Gains Since 1968, Today’s Minimum Wage Would Be $24 an Hour:

If the minimum wage had kept pace with inflation since 1968, it would be close to $12 an hour today, more than 65 percent higher than the national minimum wage of $7.25 an hour. While this would make a huge difference in the lives of many people earning close to the national minimum wage, it is actually a relatively unambitious target.

Until 1968, the minimum wage not only kept pace with inflation, it rose in step with productivity growth. The logic is straightforward; we expect that wages in general will rise in step with productivity growth. For workers at the bottom to share in the overall improvement in society’s living standards, the minimum wage should also rise with productivity.

This is an important distinction. If the minimum wage rises in step with inflation, we are effectively ensuring that it will allow minimum wage earners to buy the same amount of goods and services through time, protecting them against higher prices. However, if it rises with productivity that means that as workers are able to produce more goods and services per hour, on average, minimum wage earners will be able to buy more goods and services through time.

While the national minimum wage did rise roughly in step with productivity growth from its inception in 1938 until 1968, in the more than five decades since then, it has not even kept pace with inflation. However, if the minimum wage did rise in step with productivity growth since 1968 it would be over $24 an hour today, as shown in the Figure below

It is worth considering what the world would look like if this were the case. A minimum wage of $24 an hour would mean that a full-time full year minimum wage worker would be earning $48,000 a year. A two minimum wage earning couple would have a family income of $96,000 a year, enough to put them in the top quintile of the current income distribution.

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This raises a final point: we can’t imagine that we can just raise the minimum wage to $24 an hour without serious disruptions to the economy, many of which would have bad effects (i.e., unemployment) for those at the bottom. While there is certainly room to raise the minimum wage, and many states have done so with no measurable impact on employment, there clearly is a limit to how far and how fast we can go.

It is quite reasonable to have a target where the minimum wage returns to where it would be, if it had tracked productivity growth over the last 50 years. But we will have to reverse many of the institutional changes that have been put in place over this period to get there. This is where the sort of policies described in Rigged (it’s free) come in, but that is a much longer story.

Gus Wezerek recently wrote at the New York Times, What to Tell the Critics of a $15 Minimum Wage (excerpt)

As part of their economic aid package, President Biden and Democrats in Congress have proposed gradually increasing the federal minimum wage from $7.25 to $15 an hour by 2025.

Critics of a $15 minimum wage argue that higher labor costs would force small business owners to automate jobs or lay off workers, especially in poorer states. [Typically marginal businesses on a glide path to failure anyway.]

Republicans looking to shoot down a wage increase added another arrow to their quiver on Monday, whn the Congressional Budget Office estimated that Democrats’$15 proposal would eliminate 1.4 million jobs by 2025.

The CBO is a well-regarded nonpartisan federal agency, frequently cited by politicians and journalists. In this case, however, the agency’s projection is at odds with the latest minimum wage research.

States like Arizona and Maine have raised wage minimums in recent years, serving as pilot studies for a nationwide increase. By comparing employment levels in those states to job growth in neighboring states, economists have tried to isolate the effect of wage increases on jobs.

While some researchers have indeed found that higher minimum wages lead to fewer jobs, others have observed increases in employment.

When you look at all the results together, as one 2019 “meta-analysis” of 11 different studies did, the effect of minimum wage increases on low-wage employment averages out to be around zero.

Opponents of higher wages have also argued that raising the minimum will cause every worker to ask for a raise.

There’s not much evidence for that hypothesis. A survey of 138 minimum wage increases across the UnitedStates found that in the years afterward, there was virtually no change in the share of jobs that paid more than a few dollars above the new minimum wage.

In other words, a rising tide does not lift all boats today, as John Kennedy’s oft-quoted phrase goes.

The debate over employment and inflation has overshadowed the biggest upside toa $15 minimum wage: the lifeline it will provide to low-income Americans.

The CBO acknowledged as much in its analysis, noting that despite predicted job losses, almost a million people’s incomes would rise above the federal poverty level by 2025.

The most recent federal minimum wage increase, in 2007 [14 years ago], was passed in the Senate by a 94-3 vote. Key to securing Republican support for the raise was the inclusion of tax cuts for small businesses.

Today, there’s more evidence to suggest small businesses have little to fear from $15 an hour. [This won’t stop Republicans from fear mongering, it’s what they do.] But Democrats should be open to compromises like tax cuts [there is a small business relief in the package] and slower rollout schedules for small businesses and low-income states — whatever it takes to give families a chance to breath.

Helaine Olen at the Washington Post writes, Americans deserve a $15 an hour minimum wage. Congressional Republicans don’t agree. (excerpt):

The nonpartisan Congressional Budget Office released a survey this week proclaiming that if the federal minimum wage doubled to $15 an hour by 2025, it would lift an estimated 900,000 people out of poverty. Unfortunately, their study found that financial gain would come at a cost of an estimated 1.4 million jobs, something that could make it harder on people attempting to gain or keep a foothold in the workplace. It would also increase the federal budget deficit. Opponents once again pounced. “Let’s not forget we are recovering from a recession that disproportionately hurt businesses with hourly workers,” the National Review opined.

Please. There is a bigger truth here, one that we frequently lose sight of in the ongoing argument over a fair day’s pay for a day’s work. It is this: The minimum wage, by its very existence, makes the argument that there needs to be a floor for wages offered to workers. People who work full time do not deserve to live in penury. No one should need to work nine to five and five to nine to just get by in the United States.

* * *

The federal minimum wage has been stuck at $7.25 an hour since 2009, a record-breaking amount of time. This is despite the fact that a full-time worker earning that sum would earn less than $16,000 annually and find it all but impossible to live a life above the poverty line. Contrary to the perception that the minimum wage is simply a stepping stone for young and inexperienced workers, more than half of workers receiving minimum wage are over the age of 25 and 1 in 4 are parents.

We say that work provides dignity and security, but we often treat workers with contempt. As a result of the low minimum wage, all too many employees we’ve deemed “essential” in the past year and claim to honor and appreciate live in financially precarious positions.

Our nation’s subpar minimum wage also amounts to a back-door government subsidy to some of the nation’s largest employers, many of whom can certainly afford to pay their workers more than they currently do. They simply choose not to do so, even while overpaying celebrity CEOs and other C-suite workers.

But we all pay the bill for corporate America’s misplaced priorities and greed. A survey released by the Government Accountability Office last year studied employment records from 11 states and found that more than half of recipients of such government benefits as Medicaid and the Supplemental Nutrition Assistance Program worked full-time, many for large corporations or nonprofits like university systems. We’re actually providing what Sen. Bernie Sanders (I-Vt.) calls “corporate welfare.”

Joe Biden campaigned for president on a $15 an hour minimum wage pledge. It is, at least for now, a part of the latest economic stimulus. The House Committee on Education and Labor signed off on it on Tuesday, with all the Democrats voting in favor of increasing it to that number by 2025, while Republicans gave it a thumbs down. It’s not clear the effort will make it into the final bill — rules governing what can and can’t be passed via reconciliation efforts might stop it and Democratic Sens. Joe Manchin and Kyrsten Sinema are known to oppose it — but this should not be the end of the matter.

A $15 an hour minimum wage is not a radical ask. Americans are strongly in favor of it. … A majority of us understand something that millionaire Republican members of Congress and the chattering business class on CNBC does not: we’re all winners when the lowest-earning workers earn a living wage.

Senator Sinema, stop empowering Mitch McConnell and his politics of destruction, his policy of total obstruction and his using the filibuster rule as a weapon of mass destruction. What the hell is wrong with you? Your constituents deserve a long overdue pay raise, if not a living wage. Do the right thing.