FACTS about $15 Minimum Wage: Reduce Poverty But Cost 1.4 million Jobs
|FACTS about $15 Minimum Wage: Reduce Poverty But Cost 1.4 million Jobs|
Raising the federal minimum wage to $15 an hour, as President Joe Biden has proposed, would cost 1.4 million jobs over the next four years while lifting 900,000 people out of poverty, according to a Congressional Budget Office report Monday.
The impact on the employment rolls is slightly higher than the 1.3 million employment estimate from a 2019 report from the CBO, a nonpartisan agency that provides budgetary analysis to Congress.
Biden has acknowledged that the plan to phase in the new federal wage floor likely won’t make it through the $1.9 trillion spending plan he is pushing through Congress, though he remains committed to the increase.
Along with the reduction in employment, the federal budget deficit would increase by $54 billion over the next 10 years, a fairly negligible level considering the fiscal 2020 shortfall totaled more than $3 trillion.
As for the $15 minimum wage, Biden admitted that it likely won’t make it into the final bill because of specific Senate rules. Democrats are moving ahead with a process to pass Biden’s stimulus package through the 51-vote budget reconciliation process — thereby avoiding the normal 60-vote legislative process that can be filibustered. Biden was referring to the Byrd rule, a mechanism that dictates that the things in a reconciliation bill must impact the federal deficit.
“I put it in, but I don’t think it’s going to survive,” Biden told O’Donnell of the $15 minimum wage. “Apparently that’s not going to occur because of the rules of the United States Senate. I do think we should have a minimum wage stand by itself.” White House press secretary Jen Psaki told reporters on Monday that the White House would wait and see whether the Senate parliamentarian decides on whether the $15 minimum wage can be included in reconciliation or not.
Increasing minimum pay levels “would disproportionately raise the incomes of families at the bottom of the income distribution and would meaningfully reduce the number of families in poverty,” the Economic Policy Institute said in a recent paper.
Goldman estimated the chances of a $15 minimum wage passing as “low” with the more likely scenario something in the $10-$11 range with a gradual phase-in.
The CBO's report on Monday echoed a similar one in 2019, when the agency assessed the impact of a similar bill to raise the federal minimum to $15 by 2025. At the time, the Raise the Wage Act passed in the Democrat-controlled U.S. House of Representatives but failed to gain traction in the Republican-controlled Senate.
|President Biden has advocated for a gradual increase of the federal minimum over several years. The threshold has been stuck at $7.25 an hour since 2009. Dozens of states and cities have surpassed that level; several are already on track to $15 an hour. |
Democrats in Congress have vowed to push ahead on raising the federal minimum, although the efforts to include the $15 minimum plan in coronavirus relief legislation have stalled.
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