Battle to raise the federal minimum wage

President Biden and Democrats in Congress are pushing for the federal minimum wage to be gradually increased to $15 per hour, but they're facing opposition as they try to get the proposal into the coronavirus relief bill. Mary Kay Henry, the president of the Service Employees International Union, joins CBSN to discuss what a pay hike could mean for millions of American workers.

Video Transcript

VLADIMIR DUTHEIRS: Congressional Democrats are in a standoff over raising the federal pay floor for the first time in more than a decade. Today, the Senate is expected to determine if a national $15 an hour minimum wage can be included in the coronavirus relief bill. The proposed hike would be phased in by 2025. For more on this, let's bring in Mary Kay Henry. She leads nearly two million American workers, including janitors, health care workers, and teachers, as the president of the Service Employees International Union. Ms. Henry, thank you so much for being with us. Appreciate it.

She was recently named one of Time Magazine's most influential people of 2020 for her efforts to win protections for essential workers, including PPE guarantees, hazard pay, extended health care, and paid sick leave. Congratulations on that.

MARY KAY HENRY: Thank you.

VLADIMIR DUTHEIRS: So let me ask you about this $1.9 trillion COVID package that will likely be voted on by the end of the week. This $15 an hour wage hike-- some lawmakers believe small businesses are not capable of sustaining the same rise in their wage bill as larger corporations. But as Anne-Marie has frequently pointed out, and as we just did, this is going to be phased in. Let's never underestimate the ability of American capitalism to evolve with regulations and with laws.

So what is the argument that you're hearing from those companies, especially small business owners who say maybe they can't evolve as quickly as, let's say, Amazon can, as to why they might not be supportive of this.

MARY KAY HENRY: We're having any small business owner who has a question, talk to every small business owner in cities and states that are on a path to 15, where those small business owners have experienced job growth. We increase people's take home pay, we reduce business turnover, and we expand growth in every neighborhood cause people have money in their pockets to spend. As you said, we don't get to 15 til 2025. But what it means is that there's $107 billion more in people's pockets to spend in the economy. And that helps everybody do better.

ANNE-MARIE GREEN: So according to Axios, Senator Josh Hawley is expected to pitch what's being called a "blue collar bonus." It's a three-year program that would increase worker wages in 2021, but would be paid by taxpayers rather than employers. Is that something to even consider?

MARY KAY HENRY: No. I think the minimum wage has to get acted on by Congress. We've been debating this for 10 years. We haven't raised it for 10 years. It's a measly $7.25. The first step goes to $9.20. And it's a way to honor the sacrifices of essential workers who've been showing up every day during this pandemic, putting themselves and their families at risk, and making sure that we get fed, served, delivered packages, and everything else that essential workers. So it's past time for Congress to begin to raise wages all across the economy.

VLADIMIR DUTHEIRS: Yeah, I note that there are a number of countries around the world-- developed countries around the world-- that have fairly significant minimum wages, including Luxembourg, which is a small country, Australia, they are above $12 each. But France at $11.66. And $11.66 is a pretty significant number. Germany is $10.87. So the United States would leapfrog even countries that a lot of people in this country think perhaps are the government policies are perhaps too liberal to take root in the United States.

But if we're talking about a phased induction of this minimum wage over the next three to four years, could we potentially, in other words, we really wouldn't achieve parity with some of those countries because during the same period of time, their minimum wages would increase as well presumably.

MARY KAY HENRY: Well, think of those countries-- health care and retirement. All those countries you named don't have employer based health care systems on top of their wage system. And so part of what we have to consider is how taxpayers are subsidizing low wages right now to the tune of $107 billion because somebody earning $7.25 can't pay the rent and put food on the table for their kids without also qualifying for food stamps. And that's what I think we have to end, by raising the minimum wage and allowing people who are working 80 and 100 hours a week a chance to provide for themselves and their families with the dignity of a living wage, that allows them to work their way out of poverty and into a stable and secure life, where they can expect that their kids are going to do better than they've done.

ANNE-MARIE GREEN: Yeah, and just as a reminder, $15 in 2025 is not the same. It's not going to be the same as $15 right now. There's inflation and there's no adjustment for that either. But let me float this by you, this is something else that we're hearing. Senators Mitt Romney and Tom Cotton-- they're also floating the idea of raising the minimum wage, this time just to $10 an hour. But they want to ensure that businesses are required to prove that their employees are documented, are here in this country with a legal ability to work. What's your take on that?

MARY KAY HENRY: Well, I think it's a great signal that we now have Republicans debating how much to raise the minimum wage. And it's a tribute to the fearlessness and courage of fast food workers, airport workers, nursing home workers, who've been showing up in record numbers and demanding that we raise wages. But it should not be connected to fixing the broken immigration system. 5 million undocumented workers in this country have been deemed essential by the federal government and have been showing up to work to feed, serve, and deliver packages to us. And so we have to recognize the work that immigrant workers have been doing by creating a pathway to citizenship and raising wages to $15 an hour.

VLADIMIR DUTHEIRS: We just threw up a map there that showed various states and their minimum wages. Do you see-- why not continue to leave it up to individual states as to whether or not? Because to the point that Anne-Marie made, $15 in New York, even if you take into account, for example, Manhattan versus Utica, New York, that $15 is applied differently. Cost of living is not as expensive in Utica, New York as it is in New York City. $15 in Montana or Wyoming means something very different than $15 in Washington, DC.

MARY KAY HENRY: Right, we have to establish a floor for every zip code in this country. And then New York, California, Seattle can go up from there as the market dictates, and frankly is already happening. Because those states went forward in 2015 to raising wages and we're already seeing the escalator impact it has on stimulating wages across the economy, because employers want to recruit and retain workers and decrease turnover. So I think we'll see other regions of the country go higher.

But for God's sake, let's establish a floor that allows people to work and not live in poverty and allows taxpayers to actually invest in a safety net for people that aren't working for a living.

ANNE-MARIE GREEN: You know, recently we've been talking about essential workers, particularly in grocery stores, and them asking for hazard pay. Over in California, they determined that they did deserve hazard pay. And then Kroger, one of the largest supermarket chains in the country, said instead of paying hazard pay, they would just shut down two of the grocery stores that they had there. I want to ask you, you know you're going to hear from businesses, well that's too expensive to conduct business.

There's no point in being in business if we have to pay our workers $15 an hour. Are there any protections in place to make sure that workers don't lose their jobs if stores decide, look we'll just shut our doors instead of pay?

MARY KAY HENRY: Yeah, I have to say that it's a cruel and unusual punishment for employers that have earned record profits during the pandemic to take that position. And you and I both know that Kroger's profits were higher in 2020 than in the previous three years because of the escalating demand in grocery stores during the stay at home orders. And so I think what we know to be true, when 40% of the American workforce is already on a path to 15, we've seen job growth. Employers have not shut down.

And I think this is the rattling of sabers before a federal action that happens. And thank God we have companies like Amazon and Walmart and Target coming out for the $15 minimum wage, because I think we now have an employer community that understands this economic and racial inequality is unsustainable and bad for business. And it's time for us to raise the minimum wage as part of the American Rescue Plan.

ANNE-MARIE GREEN: So you don't think there needs to be legal protections necessarily. I don't know how you would implement it because you think sort of the market will come through.

MARY KAY HENRY: Well, no, I think what we need is the ability of workers to join together in unions, and collective bargaining is the best mechanism to ensure that employers don't unilaterally shut down. But our lived experience in raising wages is that it doesn't happen. There's a lot of foreshadowing of it and scare tactics about it as the wage increase is being considered. And then once it's implemented, what businesses experience is more consuming and spending in their neighborhoods and geographies that actually allows them to hire more workers and to raise prices because people have more money in their pockets to spend.

ANNE-MARIE GREEN: All right. Mary Kay Henry, thanks a lot for talking with us.

MARY KAY HENRY: Thank you.