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With Changing Demographics, Will GOP Congress Debate Minimum Wage?

Image: Protesters pass out information sheets outside a Wendy's fast food outlet in support of a nationwide strike and protest at fast food restaurants to raise the minimum hourly wage to $15 in San Diego

File photo of protesters in San Diego, CA passing out information sheets outside a Wendy's fast food outlet in support of action to raise minimum hourly wages on December 5, 2013. MIKE BLAKE / Reuters

After President Barack Obama's executive action announcement on immigration, the political headlines have focused on how the Republican-led Congress will react on the issue. Yet lost in the large shadow of the immigration debate is whether the 2015 Congress will tackle other issues important to Latinos, especially minimum wage legislation.

Hispanics consistently prioritize government action on policies such as the economy, education and healthcare, as I show in my book Latinos in the Legislative Process. A large part of this agenda involves earning a livable wage. Despite the importance of livable wages to Latinos and other constituencies, the federal minimum wage has not been increased since 2007 and has only been raised three times over the past 30 years. In fact, the probability that Congress would seriously debate raising the minimum wage was so low this year that lobbyist groups gave it very little attention.

The minimum wage is one of the few issues that receives bipartisan support among voters. A Pew Research poll conducted earlier this year found that 90 percent of Democrats and 53 percent of Republicans favored raising the federal minimum wage from $7.25 to $10.10.

As the Pew Research chart below shows, support for raising the minimum wage is strongest among Latinos and African Americans.

Source: Pew Research Center survey January 15-19, 2014 Pew Research / Pew Research

The lack of debate and inaction at the national level has made the minimum wage a prominent issue in the states, with voters in five states endorsing an increase in the recent midterm elections. It's particularly an important topic in states with large Latino populations. In Colorado, a recent poll by Latino Decisions showed that nearly 70 percent of Latinos said they would support a candidate who increases wages for workers. On the eve of the 2014 elections, 78 percent of Latinos favored raising the federal minimum wage.

Republicans have not acted on a federal minimum wage increase, stating it should not be a federal-level issue. Republican Minority Leader Sen. Mitch McConnell said that raising the federal minimum wage will no longer be considered if the GOP won the Senate - which they did. McConnell, R-Ky., himself has voted 17 times against raising the minimum wage.

Wages and Latinos

Why is raising the minimum wage so important for Latinos? One major reason is that Hispanics are more likely than both whites and blacks to earn poverty-level wages. In 2011, 43.3 percent of Latinos were employed in jobs earning poverty level wages (compared to 23.4 of whites and 36 percent of African Americans). The trend over the last 40 years has been that the share of Latino workers earning poverty level wages remained stagnant, while the share has decreased for both whites and African Americans.

In addition, Latinos have experienced lower overall hourly wages in the past several decades as compared to whites and African Americans. The change has also been more drastic for Latinos. During 2007-2011, the period generally covering the Great Recession, hourly wages for Latinos decreased by 3.7 percent, compared to a decrease of 2.8 percent for whites and 2.4 percent for African Americans. The mean hourly wage trend is illustrated below.

Source: The State of Working America, analysis of Current Population Survey Outgoing Rotation Group microdata. Economic Policy Institute 2012. Source: Economic Policy Institute / Economic Policy Institute

Given that Latinos have more difficulty earning a livable wage and a higher median wage, it is no surprise that between 2007 and 2011, 23.2 percent of Latinos lived in poverty; this is almost 10 percentage points higher than the national rate.

Advocates of raising the minimum wage say it would help mitigate the sobering statistics mentioned above and cite economists who challenge the belief that raising the minimum wage would hurt companies. About 25 percent of the 30 million workers that would be directly impacted by a wage increase are Latino. If the minimum wage is raised to $10.10 an hour (as it has been proposed), this means a total increase in wages of $8.5 billion in real dollars. Advocates also stress higher wages would make Latinos less dependent on social services, thus reducing government spending, which is a benefit to the broader economy.

Those who oppose setting a national wage floor, mainly corporations, pro-business groups and small business owners, state that a higher minimum wage would force companies to cut low wage, entry-level jobs which would in turn hinder economic growth. This belief is supported by many in the Republican leadership as well as many GOP legislators.

Yet other high profile Republicans like Mitt Romney, Rick Santorum and Michigan governor Rick Snyder support raising the minimum wage. Snyder signed legislation earlier this year to raising Michigan's wage to $9.25 an hour after Republicans in the legislature said it would be better than the possibility of voter-approved ballot initiatives that would raise it even higher.

The question is whether livable wages will be a priority in the Republican-led Congress in the near future. For now, the minimum wage issue is being relegated to state-level action, and changes are occurring despite the work of Congress and not because of it.

Yet given current economic circumstances as well as changing demographics, Latinos and a majority of voters from both parties have clearly stated their preference for federal minimum wage increases in polls and they've acted on this preference in state voter initiatives.

As lawmakers look to 2015 and 2016, the question is whether they will heed voters and make the minimum wage part of the national agenda.