Making Government Work

These Billionaire GOP Donors Support the Idea of a $12 Minimum Wage. Will the Party Follow?

March 3, 2014
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These Billionaire GOP Donors Support the Idea of a $12 Minimum Wage. Will the Party Follow?
Protesters rally outside of a Wendy's in support of raising fast food wages from $7.25 per hour to $15.00 per hour on December 5, 2013 in the Brooklyn borough of New York City. A growing number of fast food workers in the United States have been staging protests outside restaurants, calling for a raise in wages. Andrew Burton/Getty Images
Legislators haven't found common ground quite yet, but at least the conversation has started.

Could common political ground between Democrats and Republicans be on the horizon? It looks like some influential conservative donors are shifting their ideology ever so slightly to increasing the minimum wage — a legislative issue that Democrats are pushing for as we near the midterm elections. In January, wealthy Silicon Valley executive and conservative donor Ron Unz put forth a California ballot measure that would raise the minimum wage to $10 an hour in 2015 and $12 in 2016. His perspective was this: raising the minimum wage would put more money in the average Americans’ pockets, which in turn would make them less reliant on government aid. Now Peter Thiel, the billionaire co-founder of PayPal and GOP donor, is weighing in on Unz’s plan, saying, “I actually think that it’s a very out of the box idea — but it’s something one should consider seriously.” Thiel, who has donated millions of dollars to GOP causes over the year, including $1 million to the anti-tax group Club for Growth and nearly $4 million to the Endorse Liberty PAC in support of presidential candidate Ron Paul in 2012, agrees with Unz’s assumptions that a higher minimum wage could reduce people’s dependency on welfare. “Given how low the minimum wage is — and how generous the welfare benefits are — you have a marginal tax rate that’s on the order of 100 percent, and people are actually trapped in this sort of welfare state,” he said.

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The idea of a minimum wage increase has been a hot topic of late. President Barack Obama called on Congress to work together to increase the minimum wage to $9 an hour by 2015 in his State of the Union address, saying that the move would raise the income of millions of working families. “It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets,” he said. The current federal minimum wage of $7.25 — which is used in about 30 states that don’t mandate their own — translates to a $15,000 annual salary, which the President noted is well below a living wage in many areas of the country.

Recently, House Democrats filed a “discharge petition” in an attempt to dislodge their bill that increases the minimum wage to $10.10 an hour, which would move the vote to the floor. While it seems unlikely that the petition will get the required votes, some Republican lawmakers have said that they are open to discussion on the issue. Others stick to their opposition, citing a bipartisan Congressional Budget Office report that says that raising the minimum wage would cost the economy 500,000 jobs. Democrats, on the other hand, cite another aspect of the same report — that raising the minimum wage would lift 900,000 people out of poverty. OK, so maybe legislators aren’t finding their common ground quite yet. But if there’s one certainty in politics it’s that politicians follow the money. If major conservative donors continue to push for a minimum wage increase, we might hear some GOP lawmakers singing a different tune.

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