The Senate parliamentarian has determined that an increase in the federal minimum wage cannot be part of the Covid-relief bill.
Because the minimum wage is viewed as not having a direct impact on the budget, it will not be allowed to be used in the reconciliation bill.
Reconciliation allows a simple majority to pass a bill. Budget reconcilation has been used by past administrations including President Obama to pass the Affordable Care Act and by President Trump to pass tax relief.
Democrats have made an increase in minimum wage (currently at $7.25) a priority, arguing that it has not been indexed for inflation. However, Republicans say that a higher minimum wage will hurt small businesses and have a negative effect on the number of jobs available.
According to a Congressional Budget Office analysis released last month, raising the minimum wage would result in the loss of 1.4 million jobs although, it would simultaneously lift 900,000 people out of poverty.
