Update: House Vote on Minimum WageJuly 17, 2019
With a scheduled House floor vote for later this week, top House Democrats are considering making changes to the caucus’ signature minimum wage proposal—in hopes of garnering additional support from moderates. Democratic leadership are discussing a more gradual phase-in period for the $15 per hour wage increase, giving employers six years instead of five to adjust.
Although, House Majority Leader Steny Hoyer (D-Md.) has said leadership is confident they have enough votes to pass the measure—the Raise the Wage Act, (H.R. 582)—they are still working behind the scenes to guarantee the support they need for passage. Democrats believe that moderating the proposal further could ramp up pressure on Senate Republicans and the White House to drop their opposition to a minimum wage increase.
In addition to the phase-in modification, the House is considering allowing an amendment from Reps. Stephanie Murphy (D-Fla.) and Tom O’Halleran (D-Ariz.) — both Blue Dog Coalition members — to study the economic impact of the first two wage increases outlined by the legislation.
The amendment would require the Government Accountability Office (GAO) to report to Congress on the economic and employment impacts after the minimum wage has increased from the current $7.25 to $8.55, and then to $9.85 per hour. Relevant congressional committees in the House and Senate would make recommendations within 60 days on whether future scheduled wage increases should be delayed, modified or allowed to go forward. Proponents argue it gives lawmakers in rural areas a way to explain to their constituents that it offers Congress a chance to mitigate any negative side effects of a minimum wage increase.
“The amendment promotes evidence-based policymaking. Those who believe that $15 should be our new national minimum wage should welcome an independent, objective analysis of the actual economic and employment impacts during the phase-up process,” a summary of the amendment states.
The decision to include the amendment from Reps. Murphy and O’Halleran comes after the Congressional Budget Office estimated that raising the pay floor to $15 per hour by 2025 would boost wages for 17 million workers. At the same time, the CBO projects that in an average week in 2025, 1.3 million otherwise-employed workers would be jobless if the federal minimum wage went up to $15. That’s a median estimate. Overall, CBO economists wrote that resulting job losses would likely range between “about zero and 3.7 million.”
Thus, lawmakers’ well-intended efforts to increase the federal minimum wage will likely cause a hardship for many small firms, particularly those in highly competitive industries, and could lead to reduced work-hours, lay-offs and stalled small-business growth. To offset higher employee wages, small businesses may need to raise their prices on the goods and services they sell. This can lead to decreased sales, decreased revenues and lower profits. With less money to spend, small-business owners may have to decrease or eliminate capital improvements, marketing, new hires, bonuses, debt service and production.
With House leadership planning a floor vote this week on H.R. 582 which would force small businesses around the country to implement a crippling mandated wage increase, NSBA urges caution in promulgating any kind of federal mandate on small businesses. NSBA asserts that an increase in the federal minimum wage could have a significant, negative impact on small businesses and for those seeking entry-level employment and on the U.S. economy. For these reasons, NSBA urges you to contact your lawmakers and ask them to oppose the Raise the Wage Act, H.R. 582.