Bloomberg News

Wal-Mart Favorite Pryor Breaks With Obama on Minimum Wage (1)

February 06, 2014

Mark Pryor

Sen. Mark Pryor talks to reporters after addressing the Political Animals Club in Little Rock, Arkansas on Dec. 4, 2013. Photographer: Jeannie Nuss/AP Photo

President Barack Obama held two meetings this week plotting strategy to maintain the Senate Democratic majority, while also pitching an issue that could put a vulnerable incumbent at risk: a minimum wage increase.

Senator Mark Pryor, whose home state of Arkansas is headquarters of Wal-Mart Stores Inc. (WMT:US), says he will oppose raising the minimum wage.

“I know $10.10 still isn’t a whole lot of money, but I think it’s too much, too fast,” Pryor, who is seeking a third Senate term, said in an interview at the Capitol. “I’m not supportive of that.”

The National Retail Federation and the National Restaurant Association are among groups lobbying against the measure that have contributed to Pryor’s re-election bid. Arkansas also is among four states -- Georgia, Minnesota and Wyoming are the others -- that have set minimum wages below the federal level.

“For voters, this issue transcends ideology a little bit,” said Jennifer Duffy, who tracks Senate races for the nonpartisan Cook Political Report in Washington. “Arkansas is generally not a prosperous state and it has a lot of minimum-wage jobs. These people want a raise.”

Arkansas’ median household income in 2012 was $40,112, compared with the nationwide median of $51,017, according to data compiled by Bloomberg.

Republicans have centered their bid for winning control of the Senate in November’s midterm elections on tying Democratic incumbents to Obama, especially on health care.

Six Seats

They need a net gain of six seats to take the Senate majority and are looking to oust four Democratic incumbents, including Pryor, in states Republican presidential candidate Mitt Romney won in 2012.

Romney won Arkansas by 24 percentage points in 2012. Gallup polling released Jan. 27 showed an average approval rating in 2013 for Obama among Arkansans of 35 percent, 12 percentage points lower than the national average.

Still, public opinion polls register strong support for raising the $7.25-cent federal wage, and Democrats are aiming to make Republicans’ opposition to the issue a part of their income-inequality campaign theme. A Jan. 8 poll by Quinnipiac University found 71 percent of Americans, including 52 percent of Republicans, support raising the minimum wage.

That puts Pryor, 51, in the awkward spot of being off-message with his party. He’s the only Senate Democrat so far to say he’ll oppose the wage increase, which Senate Majority Leader Harry Reid plans to bring up in early March.

Showing Independence

“Pryor has to demonstrate his independence from President Obama and the national party, and I think there’s an opportunity for him to use this vote as an example,” said Nathan Gonzales, deputy editor of the Rothenberg Political Report. “If he’s able to build a resume of items that he opposes President Obama on, and can sell that to the voters, that’s an opportunity for him to survive.”

The risk is that Arkansas voters will be on Obama’s side on the issue. Other vulnerable Democrats from Republican-leaning states that are up for re-election, including Alaska’s Mark Begich and North Carolina’s Kay Hagan, support the legislation.

Louisiana’s Mary Landrieu said in an interview, “Yes, I support the increase; don’t know what amount.”

In his State of the Union address on Jan. 28, Obama endorsed setting the federal minimum at $10.10 an hour, saying an increase would “help families” and “give businesses customers with more money to spend.”

Business groups aren’t buying that argument.

Poor Substitute

“The bill the Senate is going to move to in the coming weeks is largely a political exercise designed to drive the notion that Senate Democrats care about low-wage workers,” said David French, senior vice president of government relations at the National Retail Federation, whose members include Wal-Mart. “It’s a poor substitute for a viable economic policy that actually leads to job creation.”

Wal-Mart has been one of Pryor’s top sources of re-election money, according to data compiled by the Center for Responsive Politics, a Washington-based nonprofit that tracks election spending. The company is the world’s largest retailer.

Individuals and political action committees associated with the retailer contributed at least $22,350 to his campaign’s $5.1 million haul through the end of September, making Wal-Mart his sixth-biggest contributor. Wal-Mart’s PAC gave Pryor’s leadership committee another $25,000.

Campaign Cash

The company’s executives also contributed to Pryor’s 2008 election, giving his campaign and leadership committees $37,300 of the $6.4 million when he was unopposed.

Pryor’s opposition “is much less of a red-state issue and much more of who’s your constituency issue,” said Cook.

Wal-Mart, which came out in favor of the last minimum-wage increase Congress passed in 2007, has remained silent so far on the latest effort. The company has opposed so-called “living wage” measures in other states and cities.

The retailer last year said it would abandon planned new stores in the District of Columbia if the city adopted a requirement that large retailers pay their employees no less than $12.50 an hour in combined wages and benefits.

Wal-Mart spent about $7.3 million on federal lobbying last year, according to congressional lobbying disclosure reports. The company has about a dozen lobbyists on staff and maintains contracts with about 10 outside firms.

No Position

“In terms of taking a position on any bill at this point, we just haven’t done that,” Wal-Mart spokesman Kory Lundberg said in a telephone interview. Lundberg questioned whether the wage requirement was the most effective way to measure or promote career employees’ advancement.

The National Retail Federation has given Pryor’s campaign $1,000 for his re-election. The National Restaurant Association, a trade group that also opposes the minimum-wage increase, contributed $5,000 to Pryor’s campaign, which is the maximum under federal campaign-finance laws.

Pryor also counts those favoring a minimum-wage increase -- including labor unions such as the United Food and Commercial Workers -- among his campaign contributors.

The federal minimum wage, established in 1938 at 25 cents an hour, has increased more than a dozen times, most recently in 2009 when it rose by 70 cents to $7.25 an hour. That was the final phase of a three-step increase Congress passed in 2007.

The latest effort to increase the wage floor faces long odds on Capitol Hill. Republicans oppose it and Democrats, who control 55 seats in the 100-member Senate chamber, might not even be able to garner 60 votes to advance the legislation.

‘Bad Policy’

The Republican-led House isn’t expected to take up the bill. House Speaker John Boehner told reporters Jan. 28 that raising the minimum wage is “bad policy” because “when you raise the cost of something you get less of it,” saying it would lead to job losses.

Pryor’s presumed Republican challenger, freshman Representative Tom Cotton, voted against a wage increase to $10.10 in March of last year.

Still, proponents are counting on public pressure to build leading up to the November election.

Republican leaders bowed to past political pressure to endorse a wage-floor increase. With both the House and Senate under Republican control in 1996, Congress passed and President Bill Clinton, a former Arkansas governor who has campaigned for Pryor, signed legislation raising the minimum wage by 90 cents over two years to $5.15 an hour.

Speaker Gingrich

House Speaker Newt Gingrich agreed to bring the measure to a vote after about 20 moderate members of his conference -- faced with unrelenting pressure from Democrats -- vowed to support a Democratic wage-increase proposal if Gingrich didn’t craft a Republican alternative.

Then-Senate Majority Leader Bob Dole, of Kansas, his party’s presumed nominee to run against Clinton in his bid for a second term, agreed to bring the measure to a vote on the Senate floor. It won the support of 27 Republicans and all of the chamber’s Democrats.

“I don’t think Republicans are anxious to fight an election on the minimum wage,” Gonzales said.

To contact the reporter on this story: Kathleen Hunter in Washington at khunter9@bloomberg.net

To contact the editors responsible for this story: Jodi Schneider at jschneider50@bloomberg.net; Jeanne Cummings at jcummings21@bloomberg.net


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