CBO report: $15 minimum wage would boost pay for millions, but cost 1.4M jobs

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WASHINGTON (NewsNation Now) — The national minimum wage stands at $7.25 an hour and has not been increased since 2009. There is now strong pressure from progressives to more than double it to $15 an hour, but the question is whether it will lift low-wage workers out of poverty or force lots more to lose their jobs.

Opponents of the move argue that this is not the time to consider such a big raise, especially with the pandemic devastating the economy. North Carolina small business owner Kennis Wilkins is wary. He said an increase is due, but not so much.

“I am a small business owner and in the health care industry. And I will not be able to sustain that. We only make that per hour ourselves, so we could not pay $15 per hour to employees and keep the business open,” Wilkins said.

Many Republicans see this as a state issue and argue against a uniform national wage. They argue that a living wage in California may not be the same as one in North Dakota.

Monday a study released by the Congressional Budget Office said raising the minimum wage to $15 an hour would pull some 900,000 workers out of poverty, but by 2025 — when the last incremental step in the proposed legislation would be taken to get to that level — 1.4 million workers would be out of a job.

Michael Saltsman is with the Employment Policy Institute.

“If your idea is that you’re going to pull 900,000 people out of poverty, but at the cost of putting 1.4 million out of a job. That doesn’t feel like a particularly good trade off,” Saltsman said.

It’s been a long debate: some economists argue that higher wages would increase the cost of doing business and force many employers to make do with fewer workers or cut back on hiring. It’s also expected that many establishments would have to raise their prices to cover the higher wages — possibly jeopardizing sales.

Others, including President Joe Biden, have said better wages would attract better workers, who will spend more and boost the economy.

“I do think that we should have a minimum wage, stand by itself, $15 an hour and work your way up to the — it doesn’t have to be boom. And all the economics show, if you do that, the whole economy rises,” President Biden said in an interview on the CBS Evening News with Norah O’Donnell.

But moderate Democrats from red states may be hesitant, and that hesitancy — in a 50-50 Senate — could jeopardize President Biden’s COVID-19 relief bill if he insists that the wage boost be included.

“I think he wants to get the relief portions of that COVID bill out the door. He’s getting skepticism right now from Republicans and Democrats over the 15 thing, and I don’t think he wants to hold it up because of that provision,” Saltsman said.

Still, a study by the Economic Policy Institute said raising the minimum wage would affect about 32 million workers — most of them essential workers. And about 60% of those affected by the higher wage would be women.

History of Minimum Wage in U.S.