Members of the progressive caucus have strongly advocated
for increasing the minimum wage to $15 in line with the "Fight for $15
" movement. However, last week, eight moderate Democrats joined with Senate Republicans to oppose
using budget reconciliation to raise the minimum wage -- a move the Senate parliamentarian had previously ruled against
. Moderates argued that they wanted a slower implementation
of a higher wage. And some, such as Sen. Joe Manchin, also wanted a smaller increase
to the minimum wage.
Still, the latest polling indicates that a majority of Americans support
raising the minimum wage -- and that makes it an issue worth pursuing, even if it means President Joe Biden has to take a different tack to get there. If history is any guide, though, the fight to increase the minimum wage will not be an easy one.
The recent attempt to raise the minimum wage through budget reconciliation misses a key point from the passage of the Fair Labor Standards Act of 1938, the first bill to establish a minimum wage: compromise. To pass the bill, then-President Franklin D. Roosevelt and his allies in Congress made countless concessions to trade unions in the North and agriculturalists in the South. But in so doing, Roosevelt helped to solidify what became known as the New Deal Coalition, which powered
the Democratic Party to electoral victory for a generation.
However, unlike Roosevelt and the Democrats who controlled
both houses of Congress by a supermajority in 1937 and had only to build a coalition within their party, Biden and the Democrats now possess the narrowest of majorities. They must therefore work with Republicans to increase the minimum wage, even if it means settling on a lower wage increase in the short run.
To combat the Great Depression, Roosevelt's New Deal attempted to address nearly every aspect of economic life. Yet, several of his early efforts, including the establishment of a National Industrial Recovery Act in 1933 that set price controls and wages in certain sectors, were deemed unconstitutional
two years later by the US Supreme Court.
In 1936, Roosevelt resoundingly won
a second term as President. He successfully reassembled the New Deal Coalition that brought
together different constituencies across the country. In particular, Roosevelt united the Southern wing of the party with the more dominant Northeastern group. In response to the massive electoral landslide, Roosevelt proposed adding
new justices to the Supreme Court. The plan went nowhere, but the Court nevertheless took
a softer tone toward new legislation addressing economic concerns.
The stage was now set for Frances Perkins
, secretary of labor and the first woman to serve in a presidential cabinet, to act. Following her philosophy
of pursuing "practical possibilities," Perkins worked to craft a bill that Roosevelt sent to Congress in May 1937. The initial bill
, championed by Alabama Sen. Hugo Black
, provided for a 40-cent-an-hour minimum wage, along with provisions to cap the workweek at 40 hours and set the minimum working age at 16, and a five-person Labor Standards Board to fix wages.
Roosevelt faced backlash
from two key components of his New Deal coalition: labor unions and Southern congressmen. The unions worried that their collective bargaining rights would be impinged, while Southern Democrats wanted the rate set lower to reflect their region's lower cost of living. The bill was subsequently modified to exclude the proposed Labor Standards Board from supervising collective bargaining, assuaging the concerns of labor unions that the minimum wage would become a maximum wage.
However, it languished in the House Rules Committee until the fall of 1937. Following further outcry from conservatives in Congress and labor unions, the five-person wage board was eliminated
from the bill, and it was returned this time to the House Labor Committee for revisions.
In May 1938, with the bill still being debated
, Southern Democrats again demanded that the wage be dropped from the proposed 40 cents to 25 cents (the equivalent
to $4.54 per hour in 2019 dollars.) As a concession, the bill was revised
to start the minimum wage at 25 cents in the first year effective and increase to 40 cents over a seven-year period. In addition, wage administrators were required
to consider the cost-of-living differential in recommending future wage increases. Finally, in June 1938, more than a year after Roosevelt had first proposed the legislation, the bill was signed into law.
Fair Labor Standards Act went into effect in October 1938 and included provisions
to raise the wage and cap working hours over the ensuing years. Since then, the minimum wage has been raised
22 times by 12 different presidents, the last being made in 2007 with an effective start date of 2009.
However, these various increases have recently failed to keep pace with inflation, such that the inflation-adjusted wage actually peaked
back in 1968 ($11.55 in today's dollars). By comparison, today's $7.25 minimum offers significantly less purchasing power in inflation-adjusted dollars. Accordingly, US senators, like Bernie Sanders, propose to index
, or tie further increases, of the minimum wage to data provided by the federal Bureau of Labor Statistics.
But how can a minimum-wage increase bill pass today's Congress? Given the unlikelihood of the filibuster being eliminated any time soon, the most likely course
will be to find common ground with Republicans in the Senate. At least two Senate Republicans, Arkansas' Tom Cotton and Utah's Mitt Romney, have proposed
increasing the wage to $10, an indication
that more Republicans may follow suit.
From there, progressive advocates of an increased wage could pursue legislation at the state level
, where their efforts have already proved successful. Since 2009, some 29 states have raised
the minimum wage from anywhere between $8 to $15.
Given the partisan divisions in Congress, there does not seem to be another realistic path to a higher minimum wage. For Biden and congressional Democrats to increase the minimum wage in 2021, they need to return to the tradition of compromise pioneered by FDR and the New Deal Democrats and find common ground once again. By reaching across the aisle, millions of Americans
stand to benefit from increased wages.
In addition, by doing the hard work of battling legislatively to increase the minimum wage, the President may be able to create something of a coalition of Democrats and enough Republicans to pass not only this bill but other policies that carry broad popular support. Minimum wage, in other words, could be the next step of the most transformative
presidency since Roosevelt.