Raising the federal minimum wage to $15 per hour would come as a boon for millions of workers who would receive pay increases, but not for the millions who would lose their jobs, according to a report released Monday.

The Congressional Budget Office found that hiking the current $7.25 hourly minimum wage to $15 by 2025 would have a mixed impact on the workforce, raising the average weekly pay of an estimated 17 million while throwing as many as 3.7 million out of work.

The report, coming ahead of an expected House vote on the Raise the Wage Act, found that a $15 minimum wage would also reduce output and business income — a cost that would be passed on to consumers in the form of higher prices — for a cumulative $9 billion hit to median family income.

“On the basis of those effects and CBO’s estimate of the median effect on employment, the $15 option would reduce total real (inflation-adjusted) family income in 2025 by $9 billion, or 0.1 percent,” the report said.

The Effects on Employment and Family Income of Increasing the Federal Minimum Wage https://t.co/ME0IET1iaJ

— U.S. CBO (@USCBO) July 8, 2019

While real income for families living above the poverty line would decrease by $16 billion, or 0.1 percent, about 1.3 million people would be pulled out of poverty, the report found.

Heidi Shierholz, senior economist for the Economic Policy Institute, which supports increasing the minimum wage, said the report showed that “as a group, low-wage workers would be unambiguously better off.”

“The report finds that a $15 minimum wage would increase the wages of millions of low wage workers, increase the average incomes of low and lower-middle-income families, reduce poverty, shift money from corporate profits to the wages of low-wage workers, and reduce inequality,” she said in a statement.

Disagreeing was Samantha Summers, spokeswoman for the Employment Policies Institute, who said the findings back up other reports showing that minimum-wage increases wind up eliminating jobs for workers at the bottom rung of the economic ladder.

“If House Democrats were uneasy about voting on $15 before this week, the CBO report should have them terrified,” Ms. Summers said in a statement. “The CBO provides further evidence of what countless studies have also shown: Raising the federal minimum wage will only hurt those it intends to help, wiping out thousands of starter job opportunities and shuttering the businesses that provide them.”

Supporters of the Raise the Wage Act, which would increase the minimum wage in six steps to $15 per hour by 2024, argue that the federal floor has not budged in a decade.

At the same time, 31 states and the District of Columbia have already instituted wage rates above the federal minimum, according to data compiled by The Balance Careers.

Rep. Steve Womack, ranking Republican on the House Budget Committee, said in a statement the proposed 107 percent increase would “hurt millions of families.”

“With a strong job market, we are seeing historically low unemployment and historically high wage growth,” Mr. Womack said. “I urge House Democrats not to advance a proposal that would unravel that progress and hurt millions of families in the process.”

According to the nonpartisan @CBO, the Dems’ plan to increase the federal minimum wage to $15 per hour would put millions of Americans out of work. House Democrats should work with Republicans to continue growing the economy and creating high-quality jobs. pic.twitter.com/9vaxCIDHqj 

— House Republicans (@HouseGOP) July 8, 2019

The legislation is expected to pass the Democrat-led House but not the Republican-controlled Senate.

Alfred Ortiz, president and CEO of the Job Creators Network, said Congress should instead push initiatives designed to help fill the estimated seven million vacancies in skilled positions earning $50,00 and above.

“Equipping America’s labor force with the required skills to take on these positions will help boost wages more than a government mandate ever could,” the network said.

—-

This content is published through a licensing agreement with Acquire Media using its NewsEdge technology.

No votes yet.
Please wait...