A group of House Democrats unveiled a bill Thursday that would raise the federal minimum wage according to local costs of living around the country. The bill competes directly with another, more progressive Democratic plan that’s been gaining momentum for a nationwide $15 wage floor.
The new bill, introduced by Rep. Terri Sewell of Alabama, would set new minimum wages based on census areas, with pricey urban areas having higher wage floors than more rural ones. There would be five different wage tiers on the scale, with the minimum for each tier recalculated every three years based on average wage growth.
The sponsors have dubbed the bill the PHASE-in $15 Wage Act, playing up the gradual nature of the plan. Although all areas of the country would reach $15 per hour eventually under the bill, its framework is very different from ― and far less aggressive than ― the minimum wage plan that most Democrats have been rallying around so far.
That bill, the Raise the Wage Act, would increase the federal minimum wage in set installments until it hits $15 in 2024, after which it would be tied to an inflation index. The plan would not differentiate between various areas of the country, meaning the same baseline wage would apply in any city or state that doesn’t already mandate a higher one.
Sewell’s plan appears to have attracted a handful of mostly moderate Democrats in purple districts, who may be leery of a $15 wage floor coming to their communities in five years. Of the 12 co-sponsors listed in addition to Sewell, half are freshmen who came in on the 2018 wave that handed Democrats the House majority.
By comparison, there are already 205 Democratic co-sponsors signed on to the Raise the Wage Act, which is sponsored by Rep. Bobby Scott (Va.), chairman of the House Committee on Education and Labor. The bill would need 218 votes to pass.
Even though a minimum wage hike is unlikely to happen while Republicans still control the Senate, Democrats are now trying to figure out exactly what their plan will look like once they have the opportunity to pass it.
Rep. Andy Levin (Mich.) said he thought a regionally based minimum wage was “really bad policy.” He argued that $15 should be the baseline everywhere; otherwise, poorer areas would be consigned to low wages in perpetuity.
“What are we going to have, regional Social Security checks?” he asked. As for the political fears some members may feel in areas with a low cost of living, “Politics is about voters, and the voters want [$15]. I think it’s better for folks, politics-wise.”
In a statement, Sewell said her bill acknowledges that “the cost of living in Selma, Alabama is very different than New York City,” arguing that a uniform minimum wage would hurt small-business owners. She said her plan would give communities “the flexibility to grow their economy” while still giving minimum wage workers a raise.
A briefing paper from Sewell’s office gave some examples of what regional minimum wages might look like under the plan. By 2024, communities in the highest tier, such as New York City, would see a wage floor of $15.10, while communities in the lowest tier, such as Tuscaloosa, Alabama ― which Sewell represents ― would see a wage floor of $11.50. (New York City already has a local minimum wage of $15 for large employers and would be well beyond that for all employers by 2024.)
It would likely be over a decade before many areas would reach $15 under the plan.
In a sign of just how unsure some members are on the issue, a handful of co-sponsors of Sewell’s bill are also listed as co-sponsors on the earlier bill.
After Sewell introduced her bill Thursday, an official letter circulated among House Democrats critical of the idea of a regionally based minimum wage. Signed by Reps. John Lewis (Georgia) and Alma Adams (N.C.), the letter included the text of an opinion piece arguing that regional minimum wages reinforce poverty in low-income areas and “exacerbate existing racial disparities.”