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Reid Insists on $10.10 Wage as Some in Party Set to Talk

February 26, 2014

Reid Says He Won’t Consider Minimum Wage Below $10.10 an Hour

Protesters rally for better wages inside a Wendy's restaurant in Detroit on Dec. 5, 2013. Photographer: Paul Sancya/AP Photo

Senate Majority Leader Harry Reid won’t consider raising the U.S. minimum wage to any level less than $10.10 an hour, though some of his fellow Democrats say they are ready to negotiate a lower amount.

Three Senate Democrats seeking re-election in November expressed concerns yesterday about raising the federal wage floor to $10.10 an hour. Mary Landrieu of Louisiana, Mark Pryor of Arkansas and Mark Warner of Virginia are in races both parties view as competitive.

“There ought to be an increase in the minimum wage,” Warner said in an interview. “I think there’s a valid debate about amount and timing.”

Reid yesterday delayed a vote on minimum wage legislation, which he intended to bring up next week. The measure is a priority for President Barack Obama and a centerpiece of Democrats’ election-year focus on income inequality. The federal minimum wage of $7.25 an hour hasn’t been increased since 2009.

Asked if there would be a compromise to raise the wage and still keep it below the $10.10-an-hour level Obama endorsed in his Jan. 28 State of the Union address, Reid responded, “Not with me.”

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Reid blamed the delay in considering a minimum-wage increase on Republicans’ “continued obstruction” in the Senate.

The delay until senators return March 24 from a week-long break gives labor unions more time to organize support for the proposal, said a Senate Democratic leadership aide who requested anonymity to discuss strategy.

Retail Federation

The measure is opposed by business groups, such as the National Retail Federation, along with many Republicans, including Speaker John Boehner, who say it would lead companies to cut jobs.

“The last thing we need to be doing right now in our country, is passing legislation that destroys even more jobs,” Senate Minority Leader Mitch McConnell, a Kentucky Republican, told reporters yesterday. “This is a tepid recovery at best, the worst recovery after a deep recession since World War II.”

Debating Minimum Wages and Prosperity

A report last week by the Congressional Budget Office, Congress’s nonpartisan research arm, said the Democratic plan may cost as many as 500,000 jobs while lifting about 900,000 people out of poverty.

Voters “are keenly aware of the lack of opportunity, the dearth of jobs, and the reduction in hours that these reports make clear are occurring because of Democratic policies,” said Brook Hougesen, a spokeswoman for the National Republican Senatorial Committee, Senate Republicans’ campaign group.

Tip Earners

Landrieu told reporters yesterday that she supported some sort of wage increase, though she hadn’t committed to the $10.10 level urged by Obama. She said she was particularly interested in exploring an increase for employees who earn tips, a segment of the workforce she said was important for many industries in Louisiana.

“I’m open for ideas that people will have,” she said.

Pryor, who has said raising the minimum wage to $10.10 an hour is “too much, too fast,” said yesterday in an interview that he may consider a smaller increase.

Landrieu and Pryor are running in states that Obama lost by double digits in 2012.

A fourth Democrat, Senator Tom Carper of Delaware, also didn’t rule out support for a wage increase below $10.10 a hour. Carper pointed to Obama’s support last year for a $9 minimum wage, and said adding tax credits could make those dollars stretch further.

‘Better Shape’

“When you add in earned-income tax credit, child tax credit, it actually puts a person earning minimum wage in better shape than they were in, say, 1968 on a real dollar value,” Carper said. “You actually increase the earning power.”

As Democrats consider an increase below what Obama has endorsed, some are meeting with Senator Susan Collins, a Maine Republican, who is working to develop an alternative proposal that could gain support from senators of both parties.

“I haven’t settled on particular numbers,” Collins, the only Republican seeking re-election this year in a state Obama won in 2012, said in an interview. “I’m just trying to figure out what would do the most, in terms of not creating disincentives for employers to create jobs, and to help some of the low-income families.”

Senator Joe Manchin, a West Virginia Democrat, said he’s among those participating in the meetings.

‘In Favor’

“I’m very much in favor of raising 1 million people out of poverty, but I don’t want to sacrifice jobs,” Manchin said in an interview.

Senator Tom Harkin, an Iowa Democrat sponsoring the bill to set a $10.10 minimum wage, said he’s open to almost any changes except for a lower amount. The 39 percent increase would be about the same percentage as when lawmakers last voted to raise the wage floor in 2007, he said.

“Before the election takes place this fall, we will have an increase in the minimum wage that gets up above the poverty line,” Harkin told reporters.

The CBO report said an increase to $9 an hour would probably cost about 300,000 jobs and raise 100,000 Americans out of poverty.

Risk Factor

Companies including Darden Restaurants Inc. (DRI:US), which owns Red Lobster and Olive Garden, cite a potential minimum wage increase as a risk factor in filings with the Securities and Exchange Commission. Others, such as Costco Wholesale Corp. (COST:US), back the change, saying it would help reduce turnover and increase productivity.

A Jan. 8 poll by Quinnipiac University found that 71 percent of Americans, including 52 percent of Republicans, support a higher minimum wage.

House Minority Leader Nancy Pelosi, a California Democrat, said she will lead an effort to force a vote on raising the minimum wage. The procedure, known as a discharge petition, faces long odds of succeeding in the Republican-led House.

Gap Inc. (GPS:US), the largest clothing-focused chain in the U.S., announced plans last week to boost the hourly wages of its workers to $10 by next year, moving ahead of a potential federal increase. The change will affect 65,000 workers, the San Francisco-based company said.

Reid told reporters that Gap’s move left little reason for lawmakers to avoid raising the federal wage floor to $10.10 an hour.

“They’ve just done it,” he said. “They’ve raised the minimum wage already. It’s happening all over the country.”

To contact the reporters on this story: Kathleen Hunter in Washington at khunter9@bloomberg.net; Michael C. Bender in Washington at mbender10@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net


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  • DRI
    (Darden Restaurants Inc)
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  • COST
    (Costco Wholesale Corp)
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