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- An increase in the federal minimum wage was withdrawn Thursday as part of the stimulus package.
- Senator Bernie Sanders said Democrats would instead propose removing tax deductions from large companies that do not pay workers at least $ 15 an hour.
- He also said they would offer incentives to small businesses so they can raise wages.
- Visit Insider’s Business section for more stories.
Senator Bernie Sanders said Democrats would try to design a backdoor to implement a $ 15 minimum wage after a wage hike was removed from the $ 1.9 trillion stimulus package on Thursday night – a major setback for progressives.
Senate MP Elizabeth McDonough ruled that a minimum wage of $ 15 violated strict guidelines for the reconciliation process. It’s the legislative method Democrats use to approve the package in an online vote without Republican backing.
In a statement, Sanders criticized McDonough’s decision. “It’s hard for me to understand how oil drilling in the Arctic National Wildlife Refuge complied with the Byrd rule, but the increase in the minimum wage was not,” the Vermont Democrat said, referring to a part of the GOP tax law of 2017 authorized. through reconciliation.
Then he said he will work with other Senate Democrats on “an amendment to remove tax deductions from large profitable companies that do not pay workers at least $ 15 an hour and to provide small businesses with them. incentives they need to raise wages “.
There were early signs of Democratic support for the move Thursday night. Hawaii Senator Brian Schatz tweeted “COUNT ME IN” on Sanders’ proposal.
—Brian Schatz (@brianschatz) February 26, 2021
Senator Ron Wyden of Oregon, chairman of the Senate finance committee responsible for drafting taxes, also said in a statement: “I am looking for a tax penalty for mega-corporations that refuse to pay a living wage “.
Democrats are rushing to approve the emergency spending package before March 14, the deadline by which improved unemployment insurance begins to expire. The House is ready to vote on the back-up plan, which contains a gradual pay rise to $ 15 an hour, among other provisions such as stimulus checks, unemployment assistance and funds for vaccines.
President Nancy Pelosi said the salary increase would remain in law.
“House Democrats believe the minimum wage hike is necessary,” Pelosi said in a statement. “Therefore, this provision will remain in the US bailout on the floor tomorrow.”
Still, designing and garnering support for a new pay hike plan could complicate the quick timeline Democrats are pursuing. Some centrist Democrats may be reluctant to raise corporate taxes during the economic downturn.
It’s unclear whether the proposal would be backed by Sen. Joe Manchin, a key Democrat from West Virginia. The Sanders provision should also clarify a set of rules governed by the parliamentarian.
Congress has not increased the minimum wage since 2009, and it stands at $ 7.25 an hour. Experts say hourly workers have borne a disproportionate burden from the pandemic, suffering significant job losses in the service and leisure sectors of the economy in particular.
“Workers of color, women and young workers are overrepresented in minimum wage jobs,” said Elizabeth Pancotti, director of policy for Employment America, in a recent interview. “Politically, we have forgotten these workers over the past ten years and in the covid crisis. We haven’t put in place a risk premium, mandatory paid sick leave, or a lot of policies for workers who are still at work.
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