On April 30, Senate Republicans filibustered a bill sponsored by the Democrats and heavily promoted by President Obama that would have raised the federal minimum wage from $7.25 to $10.10 an hour. It was an impressive show of unity by GOP senators, only one of whom, Bob Corker of Tennessee, supported the Democrats’ failed effort to send the bill to the floor for a vote.
But that very day, former Minnesota Governor Tim Pawlenty made news when he said on MSNBC that “Republicans should support reasonable increases to the minimum wage.” Five days later, another 2012 GOP presidential candidate broke ranks. “Let’s not make this argument that we’re for the blue-collar guy but we’re against any minimum wage increase ever,” said Rick Santorum. “It just makes no sense.” A month after that, Mitt Romney himself joined in the apostasy: “I, for instance, as you know, part company with many of the conservatives in my party on the issue of the minimum wage. I think we ought to raise it.”
Though Pawlenty, Santorum, and Romney aren’t running for office (at least not in 2014), their prominence in the party—and the journalistic rule that says three’s a trend—was enough to prompt this front-page Washington Post headline: “Split Appears in GOP as More Call for Raising Federal Minimum Wage.”
And it isn’t just Republican ex-presidential candidates who are having second thoughts on the minimum wage. In several hotly contested Senate races, GOP challengers have commenced various sorts of waffling on the issue. In Arkansas, Representative Tom Cotton, aiming to unseat Senator Mark Pryor, let it be known that he will “carefully study” a state minimum wage increase proposal after having previously opposed the very idea of a minimum wage. In North Carolina, Thom Tillis, during the GOP primary to take on Senator Kay Hagan, called the bill to increase the federal minimum wage a “dangerous idea.” But after winning the nomination in May, he told MSNBC’s Chuck Todd that it would be appropriate for the state legislature to decide whether to raise the minimum wage, though he refused to say whether he, the speaker of the North Carolina house, would support such a move.
That there’s some dissension and subtle repositioning occurring among Republicans on this topic is understandable. The GOP is well placed to retake the Senate this November, but the minimum wage is the one issue that could rob them of that prize. Most Republican elected officials oppose raising it (or even having it) out of a conviction that it will cost jobs (and it might—as many as 500,000 jobs, according to a recent CBO projection), or to match the beliefs of their most conservative voters, or because of pressure from business groups, or all three. Yet they know full well that a higher minimum wage is hugely popular, with 70 percent of voters, including about half of all Republicans, favoring it.
Democrats know that too, which is why they’ve made raising the minimum wage the main weapon in their 2014 electoral arsenal. It’s a core Democratic conviction, an evergreen the party has periodically and profitably turned to for decades. Yet it feels newly relevant in an era of rampant income inequality. And it is the perfect rhetorical snare for any Republican who tries to capitalize on the lack of income growth in the current recovery. The same recent CBO report projects that if the Democrats’ bill becomes law, more than 16.5 million families would see their wages go up—for a collective total of $31 billon— including nearly a million families who would be lifted above the poverty line.
Indeed, Democrats have lined the route to November with a series of minimum wage traps. The April 30 Senate vote was the first; Senate leaders plan to keep bringing the bill up for a vote again and again throughout the summer and fall. Meanwhile, Democrats and groups supporting them, including labor unions, have managed to get initiatives to raise state minimum wage levels on the ballot in several states, including Arkansas and Alaska, where key Senate contests are also taking place. Such ballot measures have been shown to boost Democratic voter turnout in midterm elections by several percentage points.
Whether this will be enough to help the Democrats keep the Senate remains to be seen. But the power of the minimum wage, if handled right, to wreak havoc in the Republican ranks should not be underestimated.
The best way to understand that power is to look at the last time a sitting Democratic president tried to get a minimum wage increase past a recalcitrant Republican Congress in an election year. In 1996, Bill Clinton was running for a second term on the promise to, among other things, raise the minimum wage for the first time in five years, from $4.25 to $5.15 an hour. The House was under the control of market fundamentalists Newt Gingrich and Tom DeLay. The Senate was led by the very man running against Clinton for the presidency, Bob Dole. A less accommodating environment, in other words, is hard to imagine. Yet in the end, Clinton not only won reelection, he actually got the minimum wage bill through Congress, driving Dole out of the Senate in the process. That astonishing rout is very much on the minds of senior Obama administration officials, some of whom were directly involved in the 1996 minimum wage fight. So it’s worth looking into that fight in detail.
Bill Clinton occasionally mentioned raising the minimum wage during the 1992 presidential race, but it was not a major feature of his campaign. Nor was there much talk of it from the White House during the first two years of his presidency, despite lobbying by Labor Secretary Robert Reich and liberal stalwarts like Senator Ted Kennedy. Instead, Clinton and his New Democratic advisers were much keener to expand the Earned Income Tax Credit (EITC), essentially a subsidy for the working poor, which they did in the 1993 budget bill. Because it is targeted to families whose incomes fall below a certain level, the EITC is dollar for dollar much more effective at lifting families out of poverty than the minimum wage, for the simple reason that a large portion of those who earn minimum wage live in middle-income households (about a quarter of them are teenagers). The administration also wanted to avoid picking unnecessary fights with Republicans and business interests while they were trying to pass health care reform in 1994, a policy that, had it passed, would have done far more to improve the lives of lower-income families.
But when the push for health care reform failed, bringing in its wake a GOP takeover of both houses of Congress in the November 1994 elections, Clinton’s reluctance to engage on the minimum wage began to slowly lift as he gathered advice on how to right his presidency. In a private White House meeting in late December, Ted Kennedy argued that, rather than move to the right, as others were counseling him to do, the president should stand up for core liberal positions, like raising the minimum wage and defending Medicare, Medicaid, and education against attacks by the new conservative revolutionaries in Congress. “Their harshness will not wear well over time,” Kennedy promised. In early January, Reich made the case to Clinton that he should call for a higher minimum wage in the upcoming State of the Union address. When news leaked that Clinton would do just that, the new House majority leader, Dick Armey, a conservative former economics professor, vowed to fight a higher minimum wage “with every fiber of my being.” Other Republicans, like Dole, were more circumspect, not quite promising to oppose a popular idea but emphasizing their concerns about its potential negative effects on the economy.
Clinton’s decision to push the minimum wage issue was about more than political strategy and defending the liberal base. It was also part of the coming battle over reforming welfare, a core New Democratic issue he had run on in 1992. Having already expanded the EITC, raising the minimum wage was the logical next step in achieving the administration’s goal of “making work pay”—that is, assuring that a full-time job was a better deal economically than a welfare check.
Clinton and many of his advisers were also impressed with a study published the previous fall by Princeton University economists David Card and Alan Krueger—the latter having joined the administration as chief economist at the Labor Department. Their study looked at whether an increase in New Jersey’s minimum wage reduced employment at fast-food restaurants by comparing it with seven border counties in Pennsylvania. They found no significant differences in job gains or losses between the two states. These results, though controversial at the time, were consistent with other recent studies from the 1980s and early ’90s that had cast doubt on older assumptions by economists that modest increases in the minimum wage always bring with them serious job losses. “Now I studied the arguments and evidence for and against the minimum wage increase,” Clinton said in his State of the Union address that January. “I believe the weight of the evidence is a modest increase does not cost jobs and may even lure people back into the market.”
Republicans countered with studies of their own predicting catastrophic job losses, especially for minority youth, if the minimum wage were raised. How voters would process these dueling claims wasn’t clear, but Clinton was soon feeling better about the political wisdom of his decision. The president delightedly related to his staff a CNN interview with a woman who said her husband favored Clinton’s minimum wage proposal because it would raise wages for the vast majority of low-wage workers like himself even though some might lose their jobs. “Honey, I’ll take my chances,” the husband said.
If the proposed minimum wage increase was smart politics, almost nobody in Washington in early 1995 thought it could actually become law. Republican lawmakers, feeling triumphant from their historic takeover of both houses, were in no mood to concede on the issue. Aside from a couple of perfunctory hearings there was little discussion of it that year, and certainly no votes were allowed that might have put Republicans in the uncomfortable position of having to vote against a measure that was widely popular with the public.
Instead, Newt Gingrich pushed ahead with passing the elements of his “Contract with America” reform proposal, which ended with his engineering a series of government shutdowns in late 1995 and early ’96 meant to force the administration to accept major budget cuts. But Clinton held firm, the shutdowns famously backfired on the GOP, and by the spring of 1996, the president’s approval ratings were climbing while Republican lawmakers struggled to regroup. It was then that the Democrats sprung their trap.
In his run for the presidency, Bob Dole had decided to follow a “Rotunda strategy.” He would remain Senate leader and use his position to pass a series of bills that Clinton would either have to sign or veto, making it seem like he, not the president, was the man in charge. The dubiousness of this strategy was revealed on March 26, 1996, the very day Dole cinched the GOP nomination by winning the California primary. Ushering through a noncontroversial parks bill, Dole made an uncharacteristic slip in parliamentary procedure that allowed an alert Ted Kennedy to offer an amendment to raise the minimum wage. (“He’s just as good at what he does as Michael Jordan is at playing basketball,” Clinton would later tell Newsweek about Kennedy’s cleverness that day.) Blindsided, Dole put the Senate into a slow quorum call until he figured out what to do. He eventually utilized another parliamentary maneuver to avoid having to vote on the measure that day. “That won’t happen again,” he was heard muttering as he left the chamber.
But the item was now officially on the Senate agenda. Two days later, several moderate Republican senators from heavily unionized states announced their support for it, creating a fifty-one-vote majority in favor. Dole had to engineer a filibuster by Republicans to keep it off the floor. “We’ll be back offering this, week after week, until we get it passed,” vowed Senate Minority Leader Tom Daschle. A few weeks later, Democrats tried to add a minimum wage amendment to an immigration bill, forcing Dole to pull that bill off the floor, too.
All that spring, Democrats managed to bring the Senate nearly to a standstill with procedural tactics over the minimum wage. Meanwhile, the president was stepping up his rhetorical attacks on Dole for blocking the minimum wage proposal and deploying members of his administration, including First Lady Hillary Clinton, to stump on the issue. In his book The Politics of the Minimum Wage, political scientist Jerold Waltman of Baylor University describes the situation thusly:
From a purely political perspective, nothing could be going better for the Democrats, or worse for Dole. He was on the wrong side of the popular issue; he appeared to be stifling democracy by not even allowing a vote; he was tied down in the Senate; he was caught between moderate and pragmatic Republicans who wanted to vote and put the issue behind them and diehard conservatives and business interests who were adamantly opposed to doing so; and his reputation for legislative effectiveness was being tarnished. One Democratic strategist gloated, ”Every day spent on the minimum wage is another good day for the Democrats.”
Road wage: Barack Obama has been travelling the country arguing for a higher minimum wage. Credit: Getty Images
Things were hardly better for Republicans on the House side that spring. While Minority Leader Dick Gephardt was pressing for a vote on a similar bill to boost the minimum wage, the AFL-CIO began broadcasting pro-minimum wage ads in the districts of moderate and vulnerable House Republicans. By mid-April, twenty House Republicans had broken ranks and announced their support for the minimum wage increase.
Newt Gingrich could see that a majority was forming in both the House and the Senate to pass the minimum wage. So instead of fighting the inevitable, he decided to use the occasion to extract as much as he could for his party’s allies in the business community. “We need to be able to say that while we’re doing something that kills jobs, we’re doing other things to create jobs,” Gingrich told officials of the National Federation of Independent Businesses, a GOP-aligned trade group. “So you guys need to tell us items on your agenda that fit that bill. Just give us the list.” Republicans took that list—which included more-generous tax treatment for small businesses that made equipment purchases, and combined them with demands from larger corporations ranging from pharmaceutical companies to soft-drink makers—to the Democrats (who also had corporate tax breaks they wanted to deliver) and negotiated a deal involving $21 billion in business benefits in return for an increase in the minimum wage. Democrats also agreed to a provision demanded by Republicans and heavily lobbied for by the National Restaurant Association’s then president (and future GOP presidential candidate), Herman Cain, creating a special sub-minimum wage rate of $2.13 for employees who work for tips.
Meanwhile, Senate Democrats continued using the minimum wage to bollix up Dole. Giving his Rotunda strategy one last shot, on May 7 Dole attempted to get a vote on a temporary cut in the gasoline tax, a proposal he’d unveiled ten days previously to help energize his flagging presidential campaign. Democrats countered with a demand that their minimum wage proposal be considered along with the gasoline tax cut. Not wanting to have to vote on the minimum wage measure, Dole threw in a “poison pill”: a provision allowing companies to negotiate workplace issues with unionized employees without union involvement. The provision was anathema to organized labor, and Clinton had threatened to veto any bill that included it. So the day ended in legislative gridlock, with no votes taken.
A week later, Dole announced that, after thirty-five years in Congress, he was leaving the Senate to run full-time for the presidency. He and his staff later confirmed to reporters that his decision was driven by the grueling weeks of legislative trench warfare over the minimum wage, though he didn’t blame Democratic senators. “He told colleagues that he would have done the same thing to the Democrats if their positions were reversed,” wrote the New York Times of the consummate Washington insider.
In late May, the House approved its version of the minimum wage increase, complete with the billions in corporate tax goodies Gingrich had negotiated. The Senate then took up the House bill over the summer and, after tussles between Democrats and Dole’s successor as Senate leader, Trent Lott, passed its own version. The final conference measure passed both houses on August 2. Clinton signed the bill on August 20, a week before the start of the Democratic National Convention, in a ceremony on the South Lawn featuring a bipartisan group of lawmakers. Over the next few days he also put his pen to a bill allowing employees with preexisting medical conditions to change jobs without losing their health insurance, and to bitterly negotiated welfare reform legislation, which was made politically and programmatically stronger by the fact that those leaving the welfare roles for the workplace would be earning modestly higher wages. Dole campaign manager Scott Reed called it “the worst week of the campaign.” On October 1, a month before the election Clinton would win handily, eleven million low-income working Americans got a raise.
What lessons can be extracted from that eighteen-year-old battle that might shed light on the minimum wage fight now going on in Washington? One lesson is that predictions of economic and social doom typically ginned up by foes of raising the minimum wage should be taken with great skepticism. Back in 1996, House Majority Whip Tom DeLay called Clinton’s proposed minimum wage hike “a job killer cloaked in kindness.” Representative John Shadegg warned that one in four young minority workers not in school would lose his job, and Senator Hank Brown predicted a juvenile crime wave “of epic proportions.” Instead, in the five years that followed the signing of the minimum wage bill, the U.S. economy added record numbers of jobs, incomes for the working poor rose, unemployment among African American young people plummeted, and juvenile crime rates continued to recede.
Another lesson is that minimum wage increases do not happen without leadership. As political scientist Jerold Waltman notes, while raising the minimum wage is typically popular, support tends to be shallow and mild (the exception being unions), whereas opposition from ideological conservatives and business interests tends to be deep and passionate. In such cases, defenders of the status quo have a built-in advantage. What the events of 1996 show is that it is possible to raise the minimum wage, but only when top political leaders, and especially the president, throw their weight behind it.
There are, of course, many differences between 1996 and 2014 that complicate the comparison. Then it was a presidential election year, now it’s a midterm. The economy in 1996 was more clearly on the mend than it is today (though the full force of the ’90s boom wasn’t yet obvious to most Americans). The Republican Congress Clinton faced was not as implacably hostile to compromise as the current one, which has far fewer GOP moderates and a larger base of hard-core conservatives. Clinton was also able to fit the minimum wage issue into his broader theory about economic growth and the value of work—that work needs to be both required (via welfare reform) and rewarded (via an expanded EITC and a higher minimum wage)—that resonated with the public. For all these reasons, Obama and congressional Democrats will have a tougher time using the minimum wage issue to divide and conquer the other party.
But the Democrats do have a few advantages going for them. One is that wage stagnation and rising inequality are palpably worse problems today than they were even at the bottom of the early-’90s recession. Another is that Obama has top members of his administration who were participants in the 1996 minimum wage battle and know the drill. White House senior counselor John Podesta was counselor to Minority Leader Tom Daschle in 1995 and 1996. Labor Secretary Thomas Perez was special counsel to Senator Ted Kennedy at the same time. Both men have lead roles in orchestrating the current political battle over the minimum wage. The fissures we’ve so far seen in the GOP over this issue, in other words, are no accident.
Bill Clinton, too, is playing his part. In February, the former president headlined a fund-raiser in Louisville, Kentucky, for Alison Lundergan Grimes, the Democratic Senate nominee hoping to unseat Senator Mitch McConnell. She and McConnell are currently tied in the polls. At the event Clinton said, according to the Associated Press, that McConnell’s opposition to the minimum wage is reason enough to support Grimes. If she wins in November it wouldn’t be the first time Clinton used the minimum wage to help drive a GOP Senate leader out of office.