Politics

Democrats vow to penalize big corporations that don't pay $15 minimum wage

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Key Points
  • Democrats led by Sens. Bernie Sanders, I-Vt., and Ron Wyden, D-Ore., vowed to introduce an amendment that would penalize large companies that pay workers less than $15 an hour.
  • Sanders rebuked a key decision of the Senate parliamentarian, who determined Thursday evening that a proposed $15 minimum wage hike could not pass under the rules of budget reconciliation.
  • Wyden said their plan would levy a 5% penalty on a big corporation's total payroll if any workers earn less than a specified amount.
Senator Bernie Sanders (I-V.T.), Chairman of the Budget Committee, speaks during a U.S. Senate Budget Committee hearing regarding wages at large corporations on Capitol Hill in Washington, February 25, 2021.
Stefani Reynolds | Reuters

Top Democrats are drafting new plans that would penalize big corporations that pay their employees less than $15 an hour after a Senate official ruled Thursday that the party could not include a wage increase in its $1.9 trillion stimulus bill.

Democrats led by Sens. Bernie Sanders, I-Vt., and Ron Wyden, D-Ore., vowed to pursue amendments to the existing relief package that would punish corporations that pay workers below a certain hourly rate.

Sanders was quick to rebuke the decision of Senate parliamentarian Elizabeth McDonough, who determined Thursday evening that a proposed $15 minimum wage provision did not meet strict budgetary standards imposed under the budget reconciliation process.

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How Democrats are handling the setback in their push for a $15 federal minimum wage

"I strongly disagree with tonight's decision by the Senate Parliamentarian," Sanders said in a press release Thursday. "In the coming days, I will be working with my colleagues in the Senate to move forward with an amendment to take tax deductions away from large, profitable corporations that don't pay workers at least $15 an hour and to provide small businesses with the incentives they need to raise wages."

"That amendment must be included in this reconciliation bill," he added.

On Friday morning, Wyden, who is working closely with Sanders on the amendment, offered more details on the "plan B."

He said his amendment, if accepted, would levy a 5% penalty on a big corporation's total payroll if any workers earn less than a specified amount. Wyden added that the penalty would increase over time and include safeguards to prevent companies from trying to outsource labor to evade paying living wages.

"We couldn't get in the front door or the back door, so we'll try to go through the window," Wyden said of the new plan. "While conversations are continuing, I believe this 'plan B' provides us a path to move forward and get this done through the reconciliation process."

The U.S. last raised the minimum wage to $7.25 an hour in 2009.

Wyden, who is also the chairman of the Senate Finance Committee, added that his amendment would provide an income tax credit equal to 25% of wages, up to $10,000 per year per employer, to small businesses that pay their workers higher wages.

A senior Democratic aide confirmed Friday that Senate Majority Leader Chuck Schumer, D-N.Y., is considering adding a provision to the bill in line with what Sanders and Wyden have proposed.

Though Democrats were more vocal about the parliamentarian's decision, Republican Sen. Josh Hawley of Missouri is working to pass a new piece of legislation aimed at hiking the minimum wage for blue-collar workers.

Hawley, who faced fierce bipartisan criticism for voting to overturn the election of President Joe Biden, announced Wednesday a bill that would grant low-wage workers a "bonus" through an automatic, advanceable tax credit.

Hawley's office touted the plan as better than a minimum wage hike because it "does not place a major new burden on small businesses, many of which are still recovering from harmful shutdowns."

The senators will have their chance to introduce amendments to Biden's $1.9 trillion stimulus plan after the House passes the legislation with a vote expected in the lower chamber later Friday. Democrats hold a thin 50-50 majority in the Senate with Vice President Kamala Harris the key tiebreaking vote.

Still, debate over the bill in the Senate is expected to be rife with pitfalls, because a single Democratic vote against the plan would sink it.