A report from the Congressional Budget Office on Monday determined that a minimum wage hike to $15 an hour by 2025 could put up to 3.7 million Americans out of work.
“The federal minimum wage is $7.25 per hour for most workers. The Congressional Budget Office examined how increasing the federal minimum wage to $10, $12, or $15 per hour by 2025 would affect employment and family income,” the CBO report said. Here’s what the report found for raising the minimum wage to $15 an hour (emphasis added):
In an average week in 2025, the $15 option would boost the wages of 17 million workers who would otherwise earn less than $15 per hour. Another 10 million workers otherwise earning slightly more than $15 per hour might see their wages rise as well. But 1.3 million other workers would become jobless, according to CBO’s median estimate. There is a two- thirds chance that the change in employment would be between about zero and a decrease of 3.7 million workers. The number of people with annual income below the poverty threshold in 2025 would fall by 1.3 million.
Rep. Steve Womack of (R-AR), a ranking member of the House Budget Committee, said the report “confirms” Republicans’ objections to implementing such a mandate wage hike.
“This report confirms what we already knew about House Democrats’ Raise the Wage Act,” said Rep. Womack, according to The New York Times. “American workers and families will lose their jobs if this bill is enacted.”
Minimum wage-hike proponent Heidi Shierholz, the policy director at the Economic Policy Institute, argued that the “benefits exceed the costs.”
“As a group, low-wage workers would be just unambiguously better off,” said Shierholz, the Times reported. “The bottom line is the benefits exceed the costs.”
As highlighted by The Daily Wire in April, a study conducted by the Center for Economic Forecasting and Development (CEFD) at the University of California Riverside School of Business on the minimum wage in California’s restaurant industry showcased major drawbacks. “[T]he authors write that due to the California law that will see the state’s minimum wage increase to $15/hour by 2022, individuals who are working minimum-wage jobs will indeed see some wage growth. However, they also write that the increased minimum wage might have a warping effect the economy, leading employers to reduce hours in order to cut costs, and providing ‘fewer job opportunities’ for young or low-skill individuals entering the workforce,” reported Frank Camp.
Moreover, a survey of 197 working economists released in March overwhelmingly recommended against a $15 an hour minimum wage hike.
“According to a new survey of 197 working economists conducted in February, 74% oppose raising the federal minimum wage to $15 an hour and almost half (43%) think that the federal minimum wage should be eliminated altogether,” Hank Berrien reported, noting that “88% of economists thought an acceptable federal minimum wage should be less than $15; 66% agreed that an appropriate federal minimum wage would be $10 an hour or less. … 84% thought a $15 minimum wage would negatively affect youth employment; 77% believed that the minimum wage hike would have a negative impact on the number of jobs available.”
“Additionally, only a tiny percentage of the economists (6%) surveyed thought a $15 minimum wage would efficiently target poverty,” the report added.