With the possibility of getting a more straightforward $15 federal minimum wage increase passed under the reconciliation process as part of the Covid-19 relief package in the U.S. Senate now in doubt, Sen. Bernie Sanders (I-Vt.) is working on an alternative tax proposal as a way to make sure the nation’s largest corporations don’t continue to pay their employees what he describes as “starvation wages.”Calling Thursday’s guidance by the Senate Parliamentarian that the $15 wage increase should not be included in the Senate’s version of the bill a “setback,” Sanders told CNN‘s Anderson Cooper Friday night that lawmakers may “have to figure out another way to raise wages” as he referenced a Plan-B proposal of tax incentives tied to worker wages.
Asked by Cooper how he would determine which companies would face the new taxation policies, Sanders said Walmart continues to be the “poster child” when it comes to corporate greed and low-paid workers.
“This is a family that is incredibly wealthy,” said Sanders of the Walton Family which owns the controlling stakes in the retail giant.
“One of their owners spend zillions of dollars on antique cars,” Sanders said. “They’ve got mansions. They have all kinds of art collections. But somehow or another they can’t pay their starting wage at more than 11 bucks an hour. The same thing for Burger King, same thing for McDonald’s, same thing for Dollar General.”
Just hours after Sanders interview on CNN, House Democrats early Saturday morning approved their version of a Covid-19 package with the wage increase included.
In a video posted Saturday on social media, Sanders further expanded on the issue by calling it “outrageous” that billionaires like the Walton’s continue to see their massive fortunes soar during the pandemic when frontline workers and low-income families are just barely scraping by.
Following Thursday’s announcement by the parliamentarian, Sanders joined with Sen. Ron Wyden (D-Wash.) to float a proposal that would strip tax deductions from corporations that fail to pay their workers a living wage and provide other incentives to help small businesses make sure they can pay their employees at least $15 per hour.
As the Washington Post‘s Jeff Stein and Erica Werner report Saturday, Sanders and Wyden are among the top Democrats “trying to find a backup plan to a minimum-wage increase” by “exploring new tax penalties on firms with more than $2.5 billion in gross receipts that do not pay at least $15 an hour.”
According to the reporting:
The measure, which aides cautioned was still under discussion and subject to change, would aim to levy a 5 percent annual tax on these large corporations if they pay below $15 an hour, according to the two people, who spoke on the condition of anonymity to share details of private deliberations. Democrats might aim to ratchet up the 5 percent penalty over time for large firms that do not increase their wages, although that measure is also preliminary and could change, the people said.
The plan being discussed would overwhelmingly hit companies in the Fortune 1000, many of which have seen record profits during the pandemic. The penalty would likely start almost immediately after the law is passed.
“It is cold comfort to know that majority support for raising the minimum wage could be meaningless because of arcane Senate rules,” said Wyden, referencing the parliamentarian’s guidance on Thursday. “We couldn’t get in the front door or the back door, so we’ll try to go through the window.”
While Sanders himself suggested the Plan-B effort was only necessary because the more straightforward pathway may be blocked, critics say the more complicated route to increased wages may fair little better in terms of making its way through the Senate and simply having Vice President Kamala Harris overrule or disregard the parliamentarian’s guidance would be the better and easier path.
Mark Weisbrot, co-director of the Center for Economic and Policy Research, told the Post it would be “impossible” to adequately monitor corporations to make sure they pay at rates that aren’t mandated by the federal minimum wage statute.
“Anybody who wants to pay less than $15 under these alternatives will do it,” warned Weisbrot.
“So it’s not going to do the job,” he said. “Democrats should just overrule the Senate parliamentarian.”