By: Sean Higgins
The Chamber of Commerce, the nation’s largest business trade association, proposed raising the minimum wage to at least $10 an hour, up from its current rate of $7.25 an hour.
The Chamber, which has generally opposed raising the rate, said it was making the proposal to counter a vote in Congress set for next week to raise the rate to $15, which it said would hurt the economy.
“If the interest is in getting something done then we are willing partners for a sincere effort that reflects economic realities and combines these type of trade-offs,” said Glenn Spencer, the Chamber’s vice president for employment policy. “The choice members have as they vote moving forward on this is: Is this an effort to come to compromise as they did previously or is this an effort to have a political vote on $15?”
The Chamber sent a letter explaining its position all members of Congress Thursday.
House Democrats are preparing to vote next week on the Raise the Wage Act, which would more than double the rate to $15. The measure is unlikely to get picked up in the current Republican-lead Senate. Spencer said the next election could “scramble the variables,” however.
He said the Chamber was not backing a specific number and could go higher than than $10, but declined to say where specifically the Chamber drew the line. “To the extent that policy makers want to move higher — and there are obviously limits on that — then the more relief you are going to have to provide to small businesses,” he said.
That type of relief for small business would, among other changes, include restoring the tip credit for businesses, which allows certain employers, such as restaurants, to play less than the minimum wage, a practice the Raise the Wage Act would eliminate. The Chamber also wants a regulation clarifying that privately-owned franchises are small businesses. Such a policy would head off an effort by some states to with variable minimum rates to classify franchises as large businesses subject to higher minimums.
The nonpartisan Congressional Budget Office said Monday that raising the federal minimum wage to $15 an hour would likely cause 1.3 million people to lose their jobs. This would erase the overall benefits of the higher wage, with family income falling by $9 billion or about 0.1%, adjusted for inflation.
Less aggressive increases to the rate would have more moderate effects, the report found. An increase to $12 a hour would raise the wages for 11 million people while only causing family income to fall by $1 billion, or 0.05%, and costing about 300,000 jobs. An increase to $10 a hour, would increase wages for 3.5 million people while reducing family income by $100 million, a negligible difference.