PRICE, MEET DEMAND: Minimum wage bill could eliminate 1.3 million jobs, CBO says.

via politico:

Democrats’ signature policy proposal to raise the federal minimum wage would cost roughly 1.3 million jobs nationwide, even as it boosts wages for 17 million workers and lift 1.3 million families out of poverty, according to a report by the Congressional Budget Office released Monday.

The report — which offers the most detailed analysis to date of the proposed $15 hourly federal wage — is a mixed bag for House Democratic leaders, who are just days away from putting the legislation on the floor.

The Democratic bill, which would phase in the $15 minimum over five years, only recently won enough support from across the caucus to reach a floor vote.

CBO’s finding that a $15 hourly minimum would result in 1.3 million jobs lost was a median estimate. CBO’s upper estimate of 3.7 million jobs lost poses another test for Democratic centrists, many of whom were skeptical about the impact on local businesses. (CBO’s lower estimate was that the number of jobs lost would be “about zero.”)

The nonpartisan agency also predicted a $9 billion drop in “real income” in 2025 — largely the result of a drop in businesses’ income, as well as price increases for goods and services across the economy.

Rep. Bobby Scott (D-Va.), who has shepherded the bill as chairman of the House Education and Labor Committee, praised CBO’s findings related to higher incomes and people who would no longer be in poverty.

“The Congressional Budget Office’s report comes to a clear conclusion: The benefits of the Raise the Wage Act for America’s workers far outweigh any potential costs,” Scott said in a written statement. Scott did not address the potential job losses, but alluded to “CBO’s imprecise projections of employment effects.”

Republicans were quick to pounce on the potential job losses — a preview of potential campaign attack ads that could run against vulnerable Democrats over the next year.

“American workers and families will lose their jobs if this bill is enacted,” said Rep. Steve Womack (R-Ark.), the top Republican on the House Budget Committee, who requested the CBO score. “I urge House Democrats not to advance a proposal that would unravel that progress and hurt millions of families in the process,” Womack said.

But Heidi Shierholz of the left-leaning Economic Policy Institute said in an online post that “an employment decline … doesn’t necessarily mean any worker is actually worse off.” That’s because, he wrote, “a sizeable share of low-wage workers routinely cycle in an out of employment.” Every three months, according to Shierholz, “more than 20 percent of the lowest-wage workers leave or start [a] job.”

 

 

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