Romney, Cotton Acknowledge $10 Minimum Wage Only 'Close' to What Workers Earned in 1968

Republican Senators Mitt Romney and Tom Cotton acknowledge in a new opinion article that their proposal to raise the federal minimum wage to $10 per hour by 2025 would still fall short of the peak purchasing power minimum wage workers enjoyed back in 1968.

President Joe Biden and progressive Democrats have pushed for raising the federal minimum wage to $15 per hour by 2025 in a phased approach. They had hoped to pass the wage hike in the $1.9 trillion American Rescue Plan through the budget reconciliation process. The Senate parliamentarian, however, ruled the wage increase could not go through the complicated process. Meanwhile, Republicans and some moderate Democrats have objected to raising the federal minimum wage to $15 per hour.

Romney and Cotton, representing Utah and Arkansas, respectively, put forward their own minimum wage increase proposal last week. Like the Democrats' plan, the proposal would raise the federal minimum wage in a phased approach, but it would only increase from the current level of $7.25 per hour to $10 per hour by 2025. The wage would then be raised automatically every two years based on inflation. However, this would still keep wages lower than what Americans enjoyed at the end of the 1960s, according to the senators' own analysis.

"Our bill would also gradually raise the federal minimum wage to $10 an hour, starting one year after the official end of the pandemic. This would restore the minimum wage close to its historic, inflation-adjusted peak purchasing power of $10.54 in 1968, when economic growth was running at almost 5 percent per year and unemployment hovered around 3 percent," Cotton and Romney wrote in an opinion article published by Fox News on Monday.

Mitt Romney and Tom Cotton
Senator Mitt Romney (R-Utah) attends a hearing of the Senate Health, Education, Labor and Pensions Committee on February 25, and (right) Senator Tom Cotton (R-Arkansas) speaks during a hearing of the Senate Judiciary Committee on February 22 on Capitol Hill in Washington, D.C. Caroline Brehman/Demetrius Freema-Pool/Getty

Romney and Cotton described the Democrats' proposal as "destructive." A recent analysis by the Congressional Budget Office projected the $15 minimum wage would cost about 1.4 million Americans their jobs, but that report also found that it would raise nearly 1 million Americans out of poverty. At the same time, the GOP senators highlighted the need to raise wages, as there has not been an increase to the federal minimum wage since 2009.

"Congress hasn't increased the federal minimum wage in more than 10 years, when it was raised to $7.25 an hour. Inflation has since eroded the value of that wage by almost 25 percent, so Americans working full time at a minimum-wage job can buy less with their paycheck today than they could a decade ago," the GOP senators wrote.

An analysis by the Economic Policy Institute published last week found that the Romney-Cotton proposal would only increase wages for 3.2 percent of workers by 2025. That's significantly less than the Democrats' Raise the Wage Act, which would see increased wages for just over 21 percent of workers. In different terms, the Democrats' plan would give a raise to 32.2 million workers while the Republican senators' proposal would provide a wage hike to less than 5 million workers.

Although the $15 per hour minimum wage proposal looks unlikely to survive the budget reconciliation process in the Senate, Biden and progressive Democrats continue to back the larger wage hike.

Conservative Democratic Senator Joe Manchin of West Virginia has suggested a smaller increase of about $11 per hour would be more acceptable. But without using the budget reconciliation process, any wage hike would need the support of all 50 members of the Senate's Democratic Caucus and at least 10 Republican senators due to the upper chamber of Congress' legislative filibuster rule.

Newsweek reached out to press representatives for Romney and Cotton for comment but did not immediately receive a response.