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Senator Has a 'Plan B' to Raise Minimum Wage

Large corporations could face new 5% tax if pay falls below threshold
By Bob Cronin,  Newser Staff
Posted Feb 26, 2021 3:39 PM CST

(Newser) – With the door shut on raising the federal minimum wage through the COVID-19 relief bill, Democrats are looking for another route. Instead of mandating a $15 hourly wage, Sen. Ron Wyden suggests going at it another way: penalizing large corporations whose employees don't make a certain amount. The companies would be hit with a 5% tax penalty on their payrolls to start, the Hill reports, and the penalty could go up in time. Employers would not be able to get around the penalty by outsourcing, the Oregon Democrat said. "If a profitable mega corporation like Walmart fires a store's security guard and replaces him with a contractor who makes far less, my proposal would still require that Walmart pays a penalty," he said. The Senate parliamentarian blocked including the increase in President Biden's $1.9 trillion pandemic relief package.

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Wyden said he thinks his "Plan B" approach would avoid violating Senate rules. Sen. Bernie Sanders is working with him, per CNBC, and said he wants "an amendment to take tax deductions away from large, profitable corporations that don’t pay workers at least $15 an hour and to provide small businesses with the incentives they need to raise wages." A pair of Republicans offered their own plan, per USA Today: Sens. Mitt Romney and Tom Cotton called for setting the minimum wage at $10 and requiring businesses to vet new hires, in a crackdown against undocumented immigrants. An aide said Democratic Senate Leader Chuck Schumer is considering adding Wyden's plan to the relief bill. "We couldn’t get in the front door or the back door," Wyden said, "so we’ll try to go through the window." (Read more minimum wage stories.)

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