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Congressional Budget Office says raising minimum wage to $15 could erase 1.4 million American jobs

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Studies by the Congressional Budget Office suggest that raising the minimum wage to $15 would reduce poverty but put an estimated 1.4 million people out of work.

Democrats in Congress have tried raising the federal minimum wage from $7.25 to $15 for years and with a 50-50 in the senate, they’re closer than ever to accomplishing this goal. According to studies by the Congressional Budget Office imposing this policy would raise the wages of 17 million people lifting 900,000 of these from poverty. This policy would also however put an estimated 1.4 million people out of work.

States were already raising the minimum wage on a federal basis, some states have even surpassed that rate but congress decided to add a $15 minimum wage by 2025 as part of the agenda in the coronavirus legislation. On February 5th Senator Joni Ernst (R, Iowa) brought a bill on the floor in order to prevent the increase of the federal minimum wage during a global pandemic. The bill was one of many backed by Biden as a part of his Covid aid proposal, he however later stated he did not expect the minimum wage bill to pass Senate budget negotiations. 

The bill on minimum wage was part of Biden’s 1.9 trillion dollar stimulus plan. Imposing this bill would have created many long-term costs in addition to those already spent as part of the stimulus plan. According to Fox Business, spending on certain programs would decrease but there would inevitably be a much greater expense in government programs such as unemployment aid, Social Security benefits, and other health care programs by an estimated 54 billion dollars. Senator Bernie Sanders (I, Vermont), one of the most adamant supporters of raising the minimum wage to $15 contested this expense stating that he does not “understand how the CBO concluded that raising the minimum wage would increase the deficit by $54 billion,” he said in a statement. “Two years ago, CBO concluded that a $15 minimum wage would increase the deficit by less than $1 million over ten years.” 

The bill introduced by Senator Joni Ernst passed because of the economic crisis already facing the nation as a result of the Covid-19 pandemic. Raising the minimum wage would cause more than a million low skilled workers to lose their job during a global pandemic and thus becoming dependent on government programs. Whether the national minimum wage is going to get raised to $15 is yet unknown however, it is unlikely that this will happen during the current global pandemic as a result of the economic loss caused by such a policy.

ARTICLE: ALESSANDRO CACCAMO

POLITICS EDITOR: CARSON CHOATE

PHOTO CREDITS: THE NEW YORK TIMES

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