Moneybox

Why Republicans Might Be Open to a Minimum Wage Hike

The answer involves Waffle House.

Mitch McConnell smiles.
Mitch McConnell holds a press conference following the Senate GOP policy luncheon in the Rayburn Senate Office Building on Capitol Hill on Tuesday. Samuel Corum/Getty Images

Could there eventually be a bipartisan deal to raise the minimum wage? The idea doesn’t seem probable yet. But it is starting to at least sound plausible.

For starters, efforts by Democrats to increase the minimum on their own have hit a wall. Last week, the party abandoned its attempt to hike the federal pay floor from $7.25 to $15-an-hour as part of its coronavirus relief package, after the Senate parliamentarian ruled it couldn’t be included for procedural reasons. They briefly entertained an iffy and roundabout backup plan, which would have tried to simulate a minimum wage by imposing a punitive tax on large employers that paid under $15 hourly, before dropping the issue entirely from the bill.

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In the meantime, a number of Republicans senators have suggested that, while they’re opposed to the push for $15, they could be amenable to a more modest hike. Utah’s Mitt Romney and Tom Cotton of Arkansas, who both supported minimum increases in the past, have been the most vocal, touting a plan that would raise the floor to $10-an-hour over five years and require employers to check the legal status of their workers via the E-Verify system, in order to prevent them hiring undocumented immigrants. Their legislation is backed by Ohio’s Rob Portman, West Virginia’s Shelley Moore Capito, and Maine’s Susan Collins.* Capito said she could go higher than $10, though Democrats needed to “realize it’ll have to be a compromise figure.”

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There have been murmurs elsewhere in the GOP’s caucus, too. Louisiana’s Bill Cassidy recently said he’d be open to “gradually” increasing the minimum wage, though he hasn’t specified a magic number. Missouri’s Josh Hawley recently unveiled his own bill that would increase the minimum to $15 for corporations that earn more than $1 billion. Maybe oddest of all, Lindsey Graham last month told reporters that he is looking at a plan to raise the minimum wage from Waffle House—as in, America’s favorite purveyor of cheese grits—that he planned to share with West Virginia Democrat Joe Manchin, who himself has said he’d prefer an $11 minimum.

“The Waffle House is where the rubber meets the road in terms of affordable good food and people working hard and living off tips,” Graham said. “So they’ve got a plan that I’m going to talk to Joe Manchin about, about how to increase the minimum wage and index it to inflation, that will be easier for business and get us to where we want to go.” (Graham’s office did not return an email seeking more details on the Waffle House plan, though Politico reports that it would involve raising the minimum to $15 over “six or seven” years).

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For those counting, that’s at least eight Senate Republicans who are open to some sort of minimum wage hike. The GOP’s top lawmakers haven’t squelched the idea, either. “It is true that it hasn’t been raised in quite a while and I think it’s worth discussing,” Senate Minority Leader Mitch McConnell said on Tuesday after being asked about a hike to $10.*

With Republicans signaling openness to talks, the Biden administration, which has previously backed a $15 minimum, is reportedly debating whether to try negotiations. “They don’t want to blow up the world politically and pay a huge political cost, but if the politics aligned for a smaller increase, Joe Biden generally wants to get deals done,” a source told Politico.

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If Republicans really do ask for Democratic concessions on immigration policy, talks may go nowhere. E-Verify in particular seems like a nonstarter: The system is designed to prevent undocumented individuals from finding work in the U.S. and drive them back out of the country. It doesn’t work all that well in the handful of states where it’s required, in large part because of lax enforcement. But it seems unlikely that the Biden administration would ever agree to mandate it nationally at a moment when it’s advocating a path to citizenship for nonlegal residents.

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Still, it seems like it would be worthwhile for both sides to have discussions. For Democrats, the incentives are obvious. They want to raise the minimum wage but are being blocked from doing so unilaterally on procedural grounds. Specifically, the Senate parliamentarian has said they cannot pass a hike using the budget reconciliation process, the maneuver lawmakers are relying on to evade the Senate filibuster and pass legislation without Republican support. In theory, Democrats could choose to ignore the parliamentarian, or blow up the filibuster, but at the moment don’t have support to do so within their caucus. That leaves bipartisan talks as the way forward.

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As for Republicans? Sure, it’s possible that the Romney-Cotton proposal is an elaborate messaging exercise, meant to show the public that they’re open to a minimum wage hike without actually trying to pass one. But there are good reasons to genuinely think the GOP’s long-standing opposition to minimum wage increases—it resoundingly rejected a hike to just $10.10 an hour in 2014, with all but one senator voting against—may genuinely be softening.

First, increasing the minimum wage is an extremely popular idea, politically. It consistently polls well nationally—83 percent of Americans believe that the current minimum is too low—and tends to win resounding victories in state ballot initiatives, including in red America. Voters in Arkansas and Missouri approved major hikes in 2018, and last year a measure to gradually increase the minimum to $15 an hour in Florida passed with 61 percent support. It is very obvious where most Americans stand on this topic.

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Second, many Republicans represent states that already have relatively high minimums. Alaska, Missouri, Maine, Arkansas, and Florida all have pay floors that are either above $10 an hour or are set to reach it this year. Between them, they also send nine Republicans to the Senate. All of these politicians have room to support an increase that won’t upset their business backers back home.

At the same time, many big-box retailers and other national chains have already embraced a higher minimum wage. Thanks largely to a combination of a decent pre-COVID economy that created stiff competition for hiring and a desire for decent PR, Target, Best Buy, Amazon and Whole Foods, Starbucks, Hobby Lobby, Costco, and a long list of banks have all voluntarily adopted a $15 minimum wage, according to a list compiled by the National Employment Law Project (some are in the process of raising it to that level). Walmart, the longtime face of low wages, is already at $11, though about half of its workforce is set to earn at least $15 hourly after a recent bump.

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With companies adopting minimum wages of their own, there’s now less lobbying pressure coming from the S&P 500 set. Amazon has actually begun advocating in favor of a $15 national minimum, possibly because it would put competition at a disadvantage. And even some companies that haven’t adopted a higher minimum on their own have dropped their opposition to hikes at the state or federal level. In 2019, for instance, McDonald’s announced it would stop lobbying against minimum wage hikes. The reason mostly seems to be that these chains have learned to deal with higher minimum wages in states like California and New York and have realized that they can pass the extra cost onto customers if need be—which basically turns a hike into a transfer to low-paid workers from higher-earning consumers.

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Add it all up and you have a situation where both sides have some reason to compromise on this issue—Democrats, so that they can accomplish an important item on their to-do list, and Republicans, so that they don’t have to worry about being beaten over the head with an issue popular with many of their own constituents. Plus, you know, it would improve livelihoods. I wouldn’t bet a lot of money that Congress will strike a bipartisan compromise on this issue. But $10 or $12? Sure.

Correction, March 5, 2021: This post originally misidentified Mitch McConnell as the Senate majority leader.

Correction, March 4, 2021: This post originally misspelled Shelley Moore Capito’s first name.

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