Yahoo Finance’s Jessica Smith to break down the new Republican minimum wage plan.

Video Transcript

KRISTIN MYERS: All right, I want to turn now to what's happening on the Hill. Our chief political correspondent Jessica Smith is here with a new Republican-- you heard me right-- Republican-backed bill to raise the minimum wage. Hey, Jess.

JESSICA SMITH: Hey, Kristin. Yeah, we now we know President Biden and Democrats were trying to raise the minimum wage to $15 an hour in the next relief bill. And today, we got to look at a Republican counterproposal. This is from Senator Mitt Romney and Senator Tom Cotton. They are hoping to raise the minimum wage to $10 an hour gradually over the course of four years. And then they would also index the minimum wage to inflation every two years after that.

And it would create a slower phase-in for small businesses, those businesses that have fewer than 20 employees. They would actually have five years to reach $10 an hour under this proposal. And it would not go into effect until after the COVID-19 pandemic is over. That is something that we've heard a lot from Republicans, that struggling small businesses cannot afford a wage hike right now. So this would put that off until the pandemic is over.

It would also mandate e-verify for all employers. That requirement would phase in over the course of 18 months. That's an effort to crack down on businesses who hire undocumented workers. Their proposal would also increase the penalties for companies that do so.

In a statement announcing this bill, Senator Tom Cotton said, "Ending the black market for illegal labor will open up jobs for Americans. Raising the minimum wage will allow Americans filling those jobs to better support their families. Our bill does both."

Now, not too surprisingly, Democrats are not likely to get on board with this legislation. Again, they are pushing for $15 an hour. Moderate Democrat Joe Manchin has proposed an $11 or $12 compromise. And Senator Bernie Sanders was asked about that today. And he said that they're sticking to $15 an hour.

We are waiting to see if Senate rules are going to allow them to include this minimum wage hike in the relief measure. We should get a decision on that sometime tomorrow or potentially on Thursday. It's still up in the air. But we're thinking that decision will come this week, Kristin.