Gradually raising the federal minimum wage to US$15 an hour would boost pay for as many as 27 million workers, but it could also cost as many as 1.3 million jobs by 2025, a report released on Monday by the non-partisan Congressional Budget Office said.
That is the trade-off facing Democrats in the US House of Representatives as they prepare to vote on legislation to raise the wage, a top issue for lawmakers and the party’s presidential candidates confronting an era of stagnant pay and gaping income inequality.
House Education and Labor Committee Chairman US Representative Bobby Scott said there is no question the report makes the case for increasing the wage, which would be the first in a decade.
“The benefits vastly outweigh any costs,” Scott said on a call with reporters. “Anybody who reads the whole report will be impressed by 27 million people having significant benefits.”
The office found that about 17 million workers earning less than US$15 per hour would see their wages boosted, and another 10 million already at that pay level could also benefit.
The policy would also lift about 1.3 million workers, half of them children, out of poverty, it said.
At the same time, boosting the federal minimum could result in job losses. That has long been the argument against wage hikes, particularly from Republicans in the US Congress and their allies in the business community.
The report acknowledges “considerable uncertainty” around this issue.
It expects 1.3 million workers would lose their jobs, but also says there is a chance there could be as many as 3.7 million — or the outcome could be no job losses at all.
Douglas Holtz-Eakin, a conservative-leaning former director of the office, on Twitter said: “results not shocking _ lose 1.3m jobs (median).”
He said those advocating for legislation to raise the wage are “really missing the point about helping genuinely poor.”
Now at US$7.25 an hour, the federal minimum has not been raised since 2009, when Democrats last controlled the House, although 29 states and several cities have set their minimum wage above that level.
House Democrats have struggled to coalesce around a bill this year that would satisfy the liberal flank that largely supports the US$15 hourly wage and lawmakers from more conservative, rural and lower-income areas who worry about the economic fallout.
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