The Heritage Foundation was instrumental in defeating a proposal to increase the federal minimum wage to $15 per hour in the recent reconciliation bill. The provision had been attached to this year’s COVID-19 relief bill.
According to a study the non-partisan Congressional Budget Office, increasing the federal minimum wage to $15 per hour would 1.4 million Americans out of work, at a time when many Americans are struggling to find work due to the COVID-19 pandemic. Additionally, Heritage research shows an increased minimum wage would result massive price increases for basic services, including childcare.
Heritage was one of the first think tanks to argue that tacking a minimum wage proposal onto a reconciliation bill would run afoul of the Byrd Rule, which is designed to keep “extraneous” provisions out of reconciliation bills. On Feb. 4, Matthew Dickerson, director of Heritage’s Grover M. Hermann Center for the Federal Budget, assessed the issue this way:
It has been noted that more than half of President Joe Biden’s stimulus proposal would be subject to points of order under the Byrd Rule. The reason these policies are being considered for reconciliation is because they are controversial and therefore unlikely to garner 60 votes to be passed through regular order, not because the policies would reduce the deficit (the intended purpose of the reconciliation process).
Focusing on the $15 minimum wage proposal, he concluded: “Increasing the minimum wage will not pass muster under the Byrd Rule, and it will not qualify for reconciliation.”
Three weeks later, Senate Parliamentarian Elizabeth MacDonough concurred. On Feb. 25, she informed senators on Feb. 25 that the proposal could not properly be considered as part of the bill. It was subsequently dropped from consideration.
In addition to providing a cogent and winning analysis of the pertinent legislative rules, Heritage hosted a public event with Sen. Mike Lee, R-Utah, during which he discussed the federal minimum wage, and how attempts to violate the Byrd Rule were a smaller form of “nuking” the Senate filibuster.
“I was pleased to hear that the Senate parliamentarian rejected the harmful and dangerous attempt by Congressional Democrats to insert a $15 minimum wage hike into the latest reconciliation bill for now,” said Heritage’s Vice President of Government Relations Tommy Binion, “Instead of destroying jobs and hiking up prices in a misguided attempt at reform, Congress should instead reduce regulatory burdens on businesses and keep taxes low on employers and employees alike to spur economic growth.”
Recognizing the value of Heritage research on the adverse effects of a $15 federal minimum wage, lawmakers called two Heritage experts to testify on the matter. Heritage Research Fellow Rachel Greszler testified before the House Subcommittee on Oversight, Investigations, and Regulations during a hearing called “Perspectives from Main Street: Raising the Wage,” while Research Fellow Joel Griffith spoke to the Senate Committee on Banking, Housing, and Urban Affairs.
Heritage Action for America, Heritage’s grassroots advocacy arm, also worked tirelessly to spread the word about the damage that would be wrought by a $15 federal minimum wage. Heritage Action President Jessica Anderson argued that raising the federal minimum wage would be “a sucker punch for Americans struggling to recover from misguided lockdowns” and that changing or ignoring reconciliation rules to pass the increase would be akin to “a dirty bomb.”
For more information on Heritage’s work in fighting a $15 federal minimum wage, click here.