After the Senate parliamentarian ruled a minimum wage hike is not allowed in the COVID relief bill, Sen. Josh Hawley (R., Mo.) proposed a bill to require billion-dollar companies pay workers $15 an hour.
The requirement would apply to companies with revenues of $1 billion or more.
"For decades, the wages of everyday, working Americans have remained stagnant while monopoly corporations have consolidated industry after industry, securing record profits for CEOs and investment bankers," said Hawley in a statement. "Mega-corporations can afford to pay their workers $15 an hour, and it’s long past time they do so, but this should not come at the expense of small businesses already struggling to make it."
After 2025, the bill would require the minimum wage for the large companies to be indexed to the federal median wage.
The ruling that the minimum wage hike could not be passed through the reconciliation process — which Democrats are using to pass the relief bill without Republican support— was a setback for Democrats. Sen. Bernie Sanders (I., Vt.) said he strongly disagreed with the decision, but is working on a backup plan.
Sanders said he is working on an amendment to end tax deductions for large corporations that pay workers less than $15 an hour. It will also give incentives to small businesses to encourage them to raise wages. Sanders said he will push to include the measure in the relief bill.
Senate Finance Committee Chairman Ron Wyden (D., Oreg.) announced he's exploring a tax penalty for "mega-corporations" that don't pay their workers enough. Wyden said he'll propose a 5% tax penalty on a big corporation's total payroll if any workers make less than a certain amount. The penalty would increase over time. He's also proposing a tax credit for small businesses that pay higher wages.
"While conversations are continuing, I believe this 'plan B' provides us a path to move forward and get this done through the reconciliation process," said Wyden.
Two Democratic Senators have said they oppose putting the $15 an hour minimum wage in the relief bill. It's not clear if the needed 50 senators would vote for the Hawley, Wyden or Sanders proposals. The House is expected to vote on the relief bill as soon as Feb. 26. Despite the parliamentarian's ruling, it will include the minimum wage hike. This leaves it up to the Senate to remove the provision. The House will have to take up the bill again, with any changes the Senate makes.
Despite slow movement on a minimum wage increase on the federal level, individual companies have been taking action on their own. This week Costco (COST) said it will boost its minimum wage by $1 to $16 starting next week. Also this week Signet Jewelers (SIG), the world’s largest retailer of diamond jewelry, announced it's raising its minimum wage for all U.S. employees to $15 per hour, to take effect by the spring of 2022.
Yahoo Finance and the Harris Poll recently found Americans overwhelmingly support raising the minimum wage.
Jessica Smith is chief political correspondent for Yahoo Finance, based in Washington, D.C. Follow her on Twitter at @JessicaASmith8.