Lebenthal Global Advisors President Dominick Tavella discusses President-elect Joe Biden’s coronavirus stimulus proposal and the White House push to return Fannie Mae and Freddie Mac to private ownership.<\/p>\n
President-elect Joe Biden is seeking to raise the federal minimum wage to $15 an hour as part of his massive $1.9 trillion coronavirus stimulus proposal, which could deal another financial blow to small businesses already struggling during the pandemic.<\/p>\n
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Biden unveiled the measure — which includes a one-time $1,400 stimulus check, extended unemployment benefits through September and funding to accelerate vaccine distribution — during a primetime address in Wilmington, Del., on Thursday. He had previously indicated that hiking the minimum wage would be a priority, but had not indicated it would be part of a broader relief deal.<\/p>\n
“No one working 40 hours a week should live below the poverty line,” Biden said. “People tell me that’s going to be hard to pass. Florida just passed it — as divided as that state is — they just passed it. The rest of the country is ready to move as well.”<\/p>\n
TOP DEMOCRATS SEE $900B COVID RELIEF PACKAGE AS JUST THE BEGINNING<\/strong><\/p>\n The proposal would increase the minimum wage, which has been stuck at $7.25 per hour for the past decade, to $15 per hour and would end the tipped minimum wage and sub-minimum wage for people with disabilities.<\/p>\n But according to a recent analysis published by the Congressional Budget Office, a nonpartisan agency, as many as 3.7 million workers could lose their jobs as a result of the minimum wage increase. At the same time, the CBO projects that some 17 million workers would receive a pay boost.<\/p>\n "For most low-wage workers, earnings and family income would increase, which would lift some families out of poverty," the report said. "But other low-wage workers would become jobless, and their family income would fall—in some cases, below the poverty threshold."<\/p>\n The pandemic has already devastated small businesses, which employ roughly 59 million Americans, or about 47.5% of the nation's entire workforce. One estimate from Yelp found that between April and September of last year, 160,000 businesses closed — or about 800 per day.<\/p>\n WHAT'S IN THE NEW $900B CORONAVIRUS RELIEF DEAL?<\/strong><\/p>\n Biden also included aid for small businesses in his relief proposal, asking Congress to set up a $15 billion grant program separate from the Paycheck Protection Program. The proposal would also make a $35 billion investment in some state, local, tribal and non-profit financing programs that can provide low-interest loans and venture capital to help small businesses.<\/p>\n Even with a monopoly on power, however, Biden could have a difficult time getting the aid package passed: Unless the Senate uses a tool known as "reconciliation" that requires only a majority vote — which Biden has signaled he doesn't support — then the legislation will need 10 GOP votes in order to pass.<\/p>\n Mitch McConnell, the top Republican in the Senate, blocked a minimum-wage increase that the Democratic-controlled House passed in 2019. Republicans argued that raising labor costs would deal another blow to small businesses already reeling from the pandemic.<\/p>\n "True to form and his signature failed ‘stimulus,’ President-Elect Biden launches yet another economic blind buffalo that does nothing to save Main Street businesses, get people back to work, or strengthen our economy," said Rep. Kevin Brady, R-Texas.<\/p>\n