Hawley thinks taxpayers, not employers, should foot the bill for higher wages

Senate Republicans have rolled out a new alternative to President Joe Biden’s proposed increase of the federal minimum wage to $15 an hour: a tax credit that would increase workers’ wages — but require taxpayers to foot the bill rather than employers.

Sen. Josh Hawley (R-MO) announced Wednesday his plan to introduce “The Blue Collar Bonus,” a refundable tax credit targeted to low-wage workers making less than the median wage of $16.50 an hour.

“Blue collar workers have shouldered the worst of the pandemic,” he tweeted. “They deserve to keep more of their hard-earned money. They deserve a pay raise. I am introducing legislation to give them one.”

Previously, Hawley said he would back increasing the minimum wage to $15 an hour — if the increase applied only to large corporations and if small businesses were exempted.

The Missouri Republican’s new measure would mean individuals making less than $16.50 an hour, or approximately $35,000 a year, would be eligible to receive a refundable tax credit of 50% of the difference between the worker’s current hourly wage and $16.50. The sum would be disbursed in four payments issued quarterly. Green card holders and undocumented individuals would be ineligible for the credit.

But, as Axios reports, the plan is ultimately paid for by the federal government, not employers, putting American taxpayers on the hook for raising workers out of poverty.

Yet Hawley has famously decried what he’s called “socialism” in the past, piling on with other Republicans in 2020 trying to scare the electorate by noting that potential presidential candidate Sen. Bernie Sanders (I-VT) was “an avowed socialist,” and tweeting in November that Democrats “love critical race theory and all the other warmed-over Marxist garbage.”

The National Republican Congressional Committee called Biden’s American Rescue Plan — which includes the federal minimum wage hike to $15 — a “$2 trillion socialist boondoggle.”

Axios notes that Hawley’s plan would also be unnecessarily complicated for workers to navigate, requiring them to do complex calculations to determine the correct take-home amount on their taxes.

Moreover, since those making less money stand to receive a larger tax credit from the measure, red states would benefit far more from the proposal than blue states would. Only one state that went blue in the 2016 presidential election has a minimum wage as low as $7.25, while 21 of 30 red states have either a $7.25 minimum wage or no set minimum wage at all.

This refundable tax credit would only be offered to workers for three years as the economy recovers from the coronavirus pandemic, and would not be a permanent measure.

Meanwhile, Democrats are attempting to push through legislation that would permanently raise the federal minimum wage to $15 an hour by 2025 in increments of $1.50 a year, which the nonpartisan Congressional Budget Office estimates would lift nearly 1 million Americans out of poverty and increase workers’ pay by a cumulative $333 billion by 2031.

Hawley’s proposed measure follows another counteroffer to Biden’s plan introduced by Republican Sens. Mitt Romney (UT) and Tom Cotton (AR), which seeks to raise the federal minimum wage no higher than $10 an hour.

Published with permission of The American Independent Foundation.