CBO: Biden's $15 minimum wage increase would lift nearly 1M out of poverty but would cut 1.4M jobs
The nonpartisan Congressional Budget Office announced Monday a study on President Biden's proposed $15 minimum wage increase would lift +900,000 Americans out of poverty over the next four years, but would also increase the unemployment rate and the deficit.
Why it matters:
President Biden inserted the federal minimum wage increase from $7.25 an hour to $15 within the $1.9 trillion coronavirus relief bill, but the proposal has been fraught with opposition from corporate Democrats, like West Virginia Senator Joe Manchin (D-WV). The report also gives political ammunition to Republicans who often describe raising the minimum wage as hurting job growth.
Sen. Sanders (I-VT) signaled to other Democrats the use of the parliamentary rule known as budget reconciliation, which allows legislation linked to the budget to circumvent the 60 vote threshold, per CNN.
Biden told CBS News that he's doubtful the $15 federal minimum wage provision within the COVID-19 relief bill would remain, "I put it in but I don't think it's going to survive."
There would be a "cumulative budget deficit over the 2021–2031 period would increase by $54 billion.
A minimum wage increase would cause a higher price for goods and services, "stemming from the higher wages of workers paid at or near the minimum wage."
"Changes in employment and the distribution of income would increase spending for some programs (such as unemployment compensation), reduce spending for others (such as nutrition programs), and boost federal revenues (on-net)
"17 million workers whose wages are below $15 per hour would be directly affected, and many of the 10 million workers whose wages would otherwise be slightly above that wage rate would also be affected."
What they're saying:
WH Press Secretary Psaki said, "the President remains firmly committed to raising the minimum wage to $15. That's why he put it in his first legislative proposal, and he believes that any American who is working a full-time job trying to make ends meet should not be at the poverty level. And it's important to him that the minimum wage is raised."
US Senator Bernie Sanders has been the most prominent supporter of the Fight for 15 movements, a political movement that wants to raise the federal minimum wage, said on Twitter, "The CBO has demonstrated that increasing the minimum wage would have a direct and substantial impact on the federal budget. What that means is that we can clearly raise the minimum wage to $15 an hour under the rules of budget reconciliation."