Senator Ron Wyden, G-Wa, has a Plan B to get the minimum wage up to $15 an hour: Use the tax code.
Wyden's idea is to institute a tax penalty for companies that won't raise wages. If they pay less than $15 an hour, they'll have to pay a tax penalty per employee. It's like giving the company a choice of ponying up for their employees or ponying up for the federal government.
Wyden's idea was designed to go into the omnibus stimulus bill, which is up for a vote in the House Friday night. If it's not there now, it will probably be there later. Wyden says that the measure works with the rules of reconciliation.
Plan A, as you'll recall, failed after the Senate Parliamentarian said a $15 minimum wage couldn't be tucked into Biden's COVID19 economic stimulus bill. You might think that Plan B would be pushing a separate bill through the Senate, but no: There are too many not-too-sure-about-this Senators who are queasy about doubling the current federal minimum ($7.25) and then some.
Natch, a tweak to the tax code is apt to be a lot more complicated than it sounds. It'd be great if, say, Dewey Cheatham and Howe Mfg., Inc. decided to pay $5 an hour to the government instead of raising its workers' pay from $10 an hour (because, say, the wage workers might develop higher expectations).
It's another matter if persons unknown decide that the tax penalty should be a small proportion of the difference between the actual pay and the putative minimum pay, thus giving companies some incentive to undercompensate. Or that the minimum should be not $15 now, but $12 now, or, as Senators Romney & Cotton would have it, $10 four years from now. It would also not be a surprise if someone found a way to make that tax penalty a writeoff.
And it's another matter still if DCH Mfg. decides to outsource by hiring contractors, turning jobs with dismal pay into an even more dismal part of the gig economy. Wyden says his plan will make that impossible. He wants this to be a carrot for small businesses and not just a stick for large ones. He figures an income tax credit of 25 percent of wages up to $10,000 a year for companies that raise their wages.
Whatever happens, the minimum wage hike is not going to disappear. It’s a very popular idea!
Think back to the first job you ever had as a teenager. What would you be earning now if your pay had kept up with inflation? Inflation calculator: https://www.bls.gov/data/inflation_calculator.htm
https://thehill.com/homenews/senate/540668-plan-b-for-15-minimum-wage-unveiled?rl=1&fbclid=IwAR2JljtdXQwhmMXnUa6jCiQ_ieVtPIUPVBx5q0TZg5L8Ry-qXEsi91sKit4
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