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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowRaising the minimum wage to $15 an hour could result in 1.4 million jobs being lost by 2025, although it would also lift 900,000 people out of poverty, according to the nonpartisan Congressional Budget Office.
The report comes as senior Democrats debate whether to include raising the federal minimum wage in a budget resolution that is largely designed to help the sputtering economic recovery and aid vaccine distribution amid the pressures of the pandemic.
The policy has split the more liberal wing of the Democratic party from moderates like Sen. Joe Manchin, D-West Virginia, who has said that he does not support the proposal.
The existing federal minimum wage, at $7.25 an hour, has not been changed since 2009 and remains below historic levels when adjusted for inflation, despite gains in worker productivity.
Last Friday, President Joe Biden said in an interview with CBS Evening News that he guessed the measure wouldn’t make the COVID relief package.
“I am prepared, as president of the United States on a separate negotiation on minimum wage, to work my way up—from, what it is now, which is pain—look, no one should work 40 hours a week and live below the poverty wage. And if you’re making less than $15 an hour, you’re living below the poverty wage,” Biden said in the CBS interview.
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I hope Joe Biden is prepared to tell the service workers industry relying on tips, they are in for a pay cut.
That’s actually untrue. I live in San Diego where our minimum wage has been steadily increasing until it hits $15 (this year I believe). Most of my friends that work as servers or bartenders make more money than I do in my job that requires my college degree. Hopefully that doesn’t last forever in my case, but it’s great for servers. They still make basically the same tips they did before restaurants started adding service fees to pay them, and now make $15/hr. They can afford apartments and live life. I don’t personally believe every state needs a $15/hr minimum wage like California, but Indiana having the minimum wage for servers set at $2.13/hr is honestly disgusting.
Anyone who thinks this is even remotely a good idea needs to take an Econ 101 class.
If you think Econ 101, could explain any of this, you are very mistaken. Try reading the actual report or one of many other reports that have researched this properly. This is a poor article with little to no context of the actual report findings.
Just a couple more nuanced articles/papers.
https://www.epi.org/blog/cbo-analysis-confirms-that-a-15-minimum-wage-raises-earnings-of-low-wage-workers-reduces-inequality-and-has-significant-and-direct-fiscal-effects-large-progressive-redistribution-of-income-caused/
https://s27147.pcdn.co/wp-content/uploads/NELP-Data-Brief-Raise-Wages-Kill-Jobs-No-Correlation.pdf
The economics of this are surprisingly non-intuitive, and yes, a good econ class might help a lot of people understand why this is a good thing. There has been a lot of situations where states or localities have raised the minimum wage to $15 an hour and the area right next door does not. The reality is that there is some adjustment at first, but as those low wage employees now have more money to spend, they spend it, and businesses do better in general, especially the ones that are likely to employee low wage employees.
I have a minor in economics and I beg to differ Lance. I don’t think every single state needs $15/hr necessarily, but it certainly needs to go up. Especially for servers that have a minimum wage of $2.13/hr in states like Indiana.
Econ 101? Sorry – I took two classes – one each of Macroeconomics and Microeconomics.
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What I learned was they’re pretty much like taking statistics classes: “figures can lie and liars can figure”.
The opponents of raising the minimum wage because it will eliminate jobs need to think through a fundamental question – is there any wage that nobody should work for less than? If yes, what is it and why would you set it at a level that’s less than what a full time worker would need to stay out of poverty? If no, then basically you support indentured servitude and quasi-slavery. Black people in the South before the civil war were fully employed. Having full employment is not a worthy goal if a huge chunk of the workforce is in abject poverty. My view would be that no business should survive if it cannot produce a product that sells at a price point with sufficient demand that enables the business to pay its workers a living wage. Perhaps carve out exceptions could be made for teenage and student part-time workers, or for some non-profit businesses where employees are semi-volunteers willing to earn less in order to do good, but the notion that we should oppose a minimum wage because some otherwise unprofitable businesses will reduce employment or go out of business makes no long term sense (unless you think indentured servitude and economic exploitation is a good thing for society).
+1
Gary, have you ever signed the FRONT of a paycheck? Your treatise suggests that a lot of decisions regarding employment will have to be made by someone other than the employer. And who knows how to make those decisions as to a “living wage,” etc…Bernie Sanders?
Bob P. +1, Gary is like a politician, used to signing the back of a check. Funny how people who dont own a business try to tell those of us who do how to run it. Kroger closed two stores in Long Beach because the city council decided that their employees needed a $4 hr raise. Guess they will be living on unemployment instead.
Hey… We have been talking about a $15 hour minimum wage for 8 or 10 years now. This idea is infected with the same problem the current minimum wage has, there is no adjustment for inflation. Adjusted for inflation, we should be talking about a $17 minimum wage now.
The obvious solution is to withhold some type of vital funding from states that don’t pass laws tying minimum wage to average wage, inflation, and COL. $15 nationwide is not appropriate. Doing nothing is also not appropriate.
As a business owner I will pass the additional payroll cost on to my customers. Why should I take a hit on my income to increase others? As an employee making minimum wage, double my income and I will work fewer hours so I have more time to enjoy my new wealth
On the other hand as an employee making minimum wage, double my income and I will be able to get off of food stamps and buy my kids nice things.
80% of the commenters have zero clue how Econ works, and “special” shout out to Gary for making it about RACISM! If any of you venture outside of Mommy’s basement, you would find you could walk into almost anywhere, and start tomorrow making $10 or more. A halfway competent and reliable adult would be making $15+ within 6 months. Except maybe Gary….
I’m curious where you get your information from. According to the BLS, there are dozens of important and critical occupations where the median wage is below $15 in Indiana. Doesn’t matter how “reliable and competent” you are, those roles would not pay more than $15 within 6 months.
https://www.bls.gov/oes/current/oes_in.htm
I don’t claim to be an economics genius but it has always been my understanding that the min. wage was an entry level wage for relatively unskilled employees. It was never meant to sustain a family, etc. It was there as a place to start and grow, with progress and experience then to a higher wage, because you earned it.
Some people are simply never going to be able to move up in society. They may lack education, motivation, have a disability, etc. Does that mean that someone working full time should live in poverty? That doesn’t make sense in the richest country on Earth. Why should anyone working 40 hours/week not be able to afford food and housing without government assistance?
To answer your last question, Wesley, because the value they add to the economy isn’t worth $15 per hour. (Is the Bernie Sanders sign still in your yard?)
That doesn’t answer my question Bob. Who are you to judge what’s worth $15/hr anyway? You clearly don’t care about those in poverty, nor anyone’s opinion who differs from your own. I don’t know why you waste your time replying to me constantly. Stick to Facebook so you don’t have to leave your bubble.