Current Events > $15 minimum wage would boost pay for 17 million workers, says CBO

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https://finance.yahoo.com/news/15-minimum-wage-would-boost-pay-for-17-million-workers-says-cbo-202803314.html

$15 minimum wage would boost pay for 17 million workers, says CBO

A new report from the Congressional Budget Office (CBO) has evaluated the impact of raising the federal minimum wage to $15, $12, or $10 per hour by 2025. According to CBO estimates, raising the minimum wage to $15 an hour would boost the pay for 17 million workers. But, says CBO, it would also cause a median 1.3 million employees to lose their jobs as employers cant afford the wage thats a 0.8% reduction of the number of employed workers.

CBO says that if the federal minimum wage were raised to $15 an hour, there is a 66% chance that between none and 3.7 million people could lose their jobs. However, the report states, there is considerable uncertainty about the size of any options effect on employment.

But those making less than $15 wouldnt be the only ones impacted by a wage increase. So would those who earn just over $15 currently. According to CBO estimates, another 10 million workers would also see a boost in their pay from a raise in the minimum wage.

The report also found other benefits. According to the CBOs analysis, 1.3 million people whose income was below the poverty line would see the wage jump over that threshold.

Raise the wage

The federal minimum wage currently sits at $7.25 an hour, and Congress hasnt raised the wage for over a decade, the longest time in history. Since the minimum wage was created in 1938, it has been irregularly increased at the will of Congress. According to the Economic Policy Institute (EPI), the minimum wage has received a boost nine times since 1938. In the last 81 years, the minimum wage has increased from 25 cents to $7.25.

Currently, 29 states and D.C. have minimum wages above the federal minimum wage of $7.25 per hour.

A January poll found that 55% of registered voters said they would support raising the minimum wage to $15, and another 27% said it should be increased but to a lesser amount. The minimum wage increase examined by CBO is similar to the wage increase called for in the Raise the Wage Act of 2019, which would bump the minimum wage to $15 by 2024 and would be indexed to wage growth thereafter.

Raising the minimum wage has become a hot-button issue among policy makers and business leaders, with some big-name companies announcing increases. Presidential candidates Kamala Harris, Joe Biden, Bernie Sanders, Elizabeth Warren, Amy Klobuchar, Beto ORourke, Julian Castro and John Hickenlooper have all publicly declared to fight for a $15 minimum wage if they were to win the White House in 2020.

Though CBOs report shows that some 27 million people would receive a boost in pay, EPIs analysis shows that raising the federal minimum wage to $15 would boost the pay for roughly 40 million workers more than a quarter of the wage-earning workforce.

While inflation levels are holding steady, the purchasing power of the current minimum wage has steadily eroded over the last decade. Since the minimum wage was raised to $7.25, its purchasing power has declined by 17%. Thats a loss of $3,000 in annual earnings for full-time minimum wage workers. Since reaching its buying power peak in 1968, the minimum wage has lost 31% in purchasing power. That means that effectively, minimum wage workers are earning more than $6,800 less than they would have in 1968 when the minimum wage was only $1.60.

The negative impacts

Critics say that boosting the minimum wage would cause employees to lose their jobs. While the report acknowledges that upwards of 3.7 million people could lose their jobs, EPI says that raising the minimum wage would outweigh the costs. They also question whether so many people would be out of a job if the minimum wage was boosted to $15.

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A majority of Americans support an increase in the minimum wage. Putting more spending power in the hands of the largest sector of Americans makes sense.
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Between nothing and a couple million

Lmao
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Artificially raising the cost of labor never benefits anyone. There needs to be migrations across state lines instead.

The wage goes up, the prices all go up, still in the same hole
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Raising it to $9-10 could work. 15 is just too high. They have skilled laborers that barely make that. The hell you need to pay burger flippers and mop pushers that much for?
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WingStopMaster posted...

Artificially raising the cost of labor never benefits anyone.

Except millions of Americans in the mid 1900s.

Bad_Mojo posted...

The wage goes up, the prices all go up, still in the same hole

Nowhere near proportionally. Not to mention that most goods are elastic enough that people will go without or find cheaper substitutes if the price is too high.

scorpion41 posted...

15 is just too high.

Why?

scorpion41 posted...

They have skilled laborers that barely make that.

And they should make more.

scorpion41 posted...

The hell you need to pay burger flippers and mop pushers that much for?

So they can eat?
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Bad_Mojo posted...

The wage goes up, the prices all go up, still in the same hole

Not really. There's not enough evidence to conclusively prove that.

What does happen, however, is that the bad and/or bad-circumstances employees are cut at the first excuse to do so, and it's even more difficult for felons and neck-tattooers to even get a job.
Basically, it marginalizes even more, the marginalized people it's supposed to benefit.

how will all but the most cash-laden companies afford this without oft-discriminatory layoffs
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TheMikh posted...

how will all but the most cash-laden companies afford this without oft-discriminatory layoffs

The article says the increase would happen by 2025, so probably some kind of incremental approach to allow for companies to adapt.
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ZMythos posted...

TheMikh posted...

how will all but the most cash-laden companies afford this without oft-discriminatory layoffs

The article says the increase would happen by 2025, so probably some kind of incremental approach to allow for companies to adapt.

"Adapt", of course, means "develop a hard-ass employee manual" with a shitton of justifications for termination.

Questionmarktarius posted...

"Adapt", of course, means "develop a hard-ass employee manual" with a shitton of justifications for termination.

I mean, you realize that with more spending power in the lower class, these businesses may just require more people?
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ZMythos posted...

Questionmarktarius posted...

"Adapt", of course, means "develop a hard-ass employee manual" with a shitton of justifications for termination.

I mean, you realize that with more spending power in the lower class, these businesses may just require more people?

Yes, but that doesn't mean they won't have bullshit standards anyway.

Sure, you or your kid may be spewing vile substances out of both ends, but there's a line of people several dozen deep who want your job, today.

Questionmarktarius posted...

Yes, but that doesn't mean they won;t have bullshit standards anyway.

Doesn't mean they will either.

You haven't substantiated any of these claims.
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ZMythos posted...

You haven't substantiated any of these claims.

https://www.seattletimes.com/business/uw-study-finds-seattles-minimum-wage-is-costing-jobs/

https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-study-casts-doubt-on-whether-a-15-minimum-wage-really-helps-workers/

Even the CBO itself says so, in the source report for TC's source.
https://www.npr.org/2019/07/08/739607964/-15-minimum-wage-would-boost-17-million-workers-cut-1-3-million-jobs-cbo-says
https://www.cbo.gov/system/files/2019-07/CBO-55410-MinimumWage2019.pdf

WingStopMaster posted...

Artificially raising the cost of labor never benefits anyone. There needs to be migrations across state lines instead.

If you want to argue that theres no net benefit to society thats fine, but to say it wouldnt benefit anyone is just plain stupid

Gotta be worth it tho so
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Questionmarktarius posted...

Even the CBO itself says so, in the source report for TC's source.

It doesn't say companies will be less willing to hire felons, which was your claim.

the 1.3 million who could lose their job is 0.8% of the workforce. Meanwhile over 17 million will see their quality of life increase.
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ZMythos posted...

It doesn't say companies will be less willing to hire felons, which was your claim.

No, there's no specific mention of felons or neck-tats, but it's incredibly obvious that they're going to be the bottom of the hiring pile, mostly because they already are right now.
Single parents are likely to get screwed over as well.

WingStopMaster posted...

Artificially raising the cost of labor never benefits anyone. There needs to be migrations across state lines instead.

artificially raising the cost, as opposed to...?
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Questionmarktarius posted...

Not really. There's not enough evidence to conclusively prove that.

What does happen, however, is that the bad and/or bad-circumstances employees are cut at the first excuse to do so, and it's even more difficult for felons and neck-tattooers to even get a job.
Basically, it marginalizes even more, the marginalized people it's supposed to benefit.

Yeah, but what about the people that already make that much an hour, like the Amazon workers. So they're getting paid minimum wage now? Or do they get a raise to be above the minimum? If Amazon has to pay them all more, then they might raise the price of a Prime Membership

It isn't the wage that is the issue, imo, it's the cost of living
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Bad_Mojo posted...

Yeah, but what about the people that already make that much an hour, like the Amazon workers. So they're getting paid minimum wage now? Or do they get a raise to be above the minimum? If Amazon has to pay them all more, then they might raise the price of a Prime Membership

There was a lot of outrage from employees when their bonuses were cut to pay for it.
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ZeroKelvin posted...

WingStopMaster posted...

Artificially raising the cost of labor never benefits anyone. There needs to be migrations across state lines instead.

If you want to argue that theres no net benefit to society thats fine, but to say it wouldnt benefit anyone is just plain stupid

Yao posted...

Gotta be worth it tho so

When you have the time, crossreference the historical real minimum wage with racial inequality in unemployment.
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Yeah, doesn't New Hampshire have the lowest poverty rate in the country while it also has the lowest minimum wage? Meanwhile here in Cali we have or had the highest poverty rate in the country despite being one of the earlier states to adopt the wage increase. Not that I'm trying to completely eliminate the correlation between minimum wages and poverty. However 15 is a pretty random number. I'm almost positive there's no particular reason for them calling for 15.

In LA alone I think the liveable wage for parent and child is at least 30 an hour. Those working these min wage jobs or need the most help are single parents. So this wage increase wouldn't fix the problem. What we really need is a revised earned income tax credit. That should be our first priority. Once that is settled we can look into wage adjustments and even then it should be dictated by sector. A nationwide wage increase that is federally enforced is unfair.

The cost of living, demand of labor, productivity, jobs, etc vary greatly throughout the country. Wage increases need to be a bit more calculated then 15 dollar minimum across the country.
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due to the methodology the CBO uses, it counts job losses as any reduction in work effort. so all 1.3 million of those workers could still be employed and actually be making more money with less work hours, but the CBO would count it as a job loss
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SailorGoon posted...

Yeah, doesn't New Hampshire have the lowest poverty rate in the country while it also has the lowest minimum wage? Meanwhile here in Cali we have or had the highest poverty rate in the country despite being one of the earlier states to adopt the wage increase. Not that I'm trying to completely eliminate the correlation between minimum wages and poverty. However 15 is a pretty random number. I'm almost positive there's no particular reason for them calling for 15.

In LA alone I think the liveable wage for parent and child is at least 30 an hour. Those working these min wage jobs or need the most help are single parents. So this wage increase wouldn't fix the problem. What we really need is a revised earned income tax credit. That should be our first priority. Once that is settled we can look into wage adjustments and even then it should be dictated by sector. A nationwide wage increase that is federally enforced is unfair.

The cost of living, demand of labor, productivity, jobs, etc vary greatly throughout the country. Wage increases need to be a bit more calculated then 15 dollar minimum across the country.

Instead of tax credits, just sack the ridiculous zoning laws boomers use to constrict the housing supply and inflate their home values and build more ****ing housing to drive down pricing.

We could also stand to benefit from rolling back union busting laws, to let workers unionize and bargain with employers for wages. Scandinavia doesn't even need minimum wages because of this. Of course, we'd have to rethink immigration since it's tool for diluting wages and undermining union bargaining power.
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averagejoel posted...

WingStopMaster posted...

Artificially raising the cost of labor never benefits anyone. There needs to be migrations across state lines instead.

artificially raising the cost, as opposed to...?

still waiting on a response to this, @WingStopMaster
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how are you going to fix zoning at a national level?
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$15/hr = $31,200 gross for 40 hours a week, 52 weeks a year.

People acting like that is a lot of money are absolutely fucking insane. And if a corporation is unable/unwilling to financially support its own workers, it does not deserve to be in business.

If you want to deal a death blow to small town small businesses, a federal $15 an hour minimum wage would be an effective and efficient way to do it.
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clearaflagrantj posted...

$15/hr = $31,200 gross for 40 hours a week, 52 weeks a year.

People acting like that is a lot of money are absolutely fucking insane. And if a corporation is unable/unwilling to financially support its own workers, it does not deserve to be in business.

this, tbh.

in most states its barely enough to survive
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Bad_Mojo posted...

then they might raise the price of a Prime Membership

and? do you think amazon workers have prime memberships

or are you just scared that maybe your cost of living might incrementally rise in order to allow the people who make it possible to stop taking payday loans in order to keep the electricity on?
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Balrog0 posted...

how are you going to fix zoning at a national level?

I'm not a policymaker. Addressing it at the national level is just as complex as addressing wages relative to cost of living at the national level, both varying dramatically from state to state, and region to region, etc. and both have peculiar externalities.
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I looked up the median annual income for my hometown, it's ~$35k. If you make the new minimum the old median I don't see any way the town survives. These aren't huge national corporations that can absorb the hit, other than the chain truck stop with a Subway in it every business is locally owned. The restaurants, coffee shop, grocery store, auto repair shop, I don't see how any of them could stay afloat if you double the minimum wage. Kill the local grocery store and the next closest place to buy groceries is an hour drive away.
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AlephZero posted...

If you want to deal a death blow to small town small businesses, a federal $15 an hour minimum wage would be an effective and efficient way to do it.

Probably why wealthy interests are beginning to push for it, whereas it was only being supported by the socialist party at the time of the 2012 election. It would be a boon for their market share and profitability relative to the effort required to compete with smaller interests.
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TheMikh posted...

SailorGoon posted...

Yeah, doesn't New Hampshire have the lowest poverty rate in the country while it also has the lowest minimum wage? Meanwhile here in Cali we have or had the highest poverty rate in the country despite being one of the earlier states to adopt the wage increase. Not that I'm trying to completely eliminate the correlation between minimum wages and poverty. However 15 is a pretty random number. I'm almost positive there's no particular reason for them calling for 15.

In LA alone I think the liveable wage for parent and child is at least 30 an hour. Those working these min wage jobs or need the most help are single parents. So this wage increase wouldn't fix the problem. What we really need is a revised earned income tax credit. That should be our first priority. Once that is settled we can look into wage adjustments and even then it should be dictated by sector. A nationwide wage increase that is federally enforced is unfair.

The cost of living, demand of labor, productivity, jobs, etc vary greatly throughout the country. Wage increases need to be a bit more calculated then 15 dollar minimum across the country.

Instead of tax credits, just sack the ridiculous zoning laws boomers use to constrict the housing supply and inflate their home values and build more ****ing housing to drive down pricing.

We could also stand to benefit from rolling back union busting laws, to let workers unionize and bargain with employers for wages. Scandinavia doesn't even need minimum wages because of this. Of course, we'd have to rethink immigration since it's tool for diluting wages and undermining union bargaining power.

The issue with this is that isn't a nationwide solution. Cost of living varies from state to state. While it would work in some states like mine, it doesn't seem like the most ideal solution on a grander scale.

The other stuff I won't disagree with since I'm unfamiliar with their economy. So I don't know what else is done differently there to accommodate that model. However I have heard that countries that have no minimum at all wage tend have better employment and poverty rates than those that do. I think it was Germany who doesn't have a min Wage, but they offer subsidies to low wage workers.
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Oh boy would I just love to need to raise all our prices to reflect needing to pay even the bottom of the barrel entry level people $15 per hour. It's not like we pay anyone under $11 in the first place, but hiking up literally everyone at once would be horrid.

SailorGoon posted...

However I have heard that countries that have no minimum at all wage tend have better employment and poverty rates than those that do.

A wage floor is just that, a floor.
If someone's labor just isn't worth the mandated minimum amount that can be paid for that labor, that someone is left with a wage of zero.

TheMikh posted...

Addressing it at the national level is just as complex as addressing wages relative to cost of living at the national level

that's not even close to being true for many reasons, but we don't even need to get into the substance of it because there's no mechanism by which the federal government can dictate to cities how they do zoning. you can pass minimum wage legislation because of the interstate commerce clause, but zoning is a hyper-local issue and it would be hard to argue there are interstate ramifications as opposed to intrastate ones that would be a strictly state issue constitutionally

the way that policymakers are proposing we get around this is by tying upzoning to particular grant programs that cities apply for federal dollars through. but that is not always going to work, they did it with highways and the drinking age but they couldn't do it with medicaid expansion. so it's an open question whether even that plan would work
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Hanky_Bannister posted...

clearaflagrantj posted...

$15/hr = $31,200 gross for 40 hours a week, 52 weeks a year.

People acting like that is a lot of money are absolutely fucking insane. And if a corporation is unable/unwilling to financially support its own workers, it does not deserve to be in business.

this, tbh.

in most states its barely enough to survive

And in some states or parts of states, it isn't enough. So raising it doesn't solve the problem for those it affects. It wouldn't be done in vain since obviously there will be those who benefit, but again it'll be pushing an equal amount under. Not everyone works for multimillion dollar companies/businesses. Not every employer can afford to offer that support. Especially ones in more rural areas that aren't pulling in as much revenue but have that low cost of living as a safety net.
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SailorGoon posted...

but again it'll be pushing an equal amount under.

Not true.

More people would benefit than not.
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Minimum wage is terrible idea and it needs to be abolished any ways. Since I've been here in San Francisco I have seen the bus pass go from $65 to $95 a month, restaurants thats not a chain raised prices to compensate, a Mexican corn went from $2 to $3, a taco went from $1.25 to $2 and every raise is due to the minimum wage going up. I don't even have to remember when we get a raise in minimum wage I just know when all of a sudden prices increase everywhere.

It's the same struggle with a higher paycheck. I'm not getting anywhere and it's a never ending circle. I've worked hard to differentiate my worth to get paid more than minimum wage, but now that minimum wage is increasing my job is giving us less hours to schedule more people so we are doing more with less hands increasing the stress load to the point where its not even worth it. I would much rather go back to having a less wage with more people on deck.
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ZMythos posted...

SailorGoon posted...

but again it'll be pushing an equal amount under.

Not true.

More people would benefit than not.

More people would benefit yes, but they'd all still be under. Plus there's a large population that would remain stagnant. A wage increase harms small businesses and those that work for them. It creates more competition, lowers demand, which in turn lowers productivity hence the loss being not actual jobs but instead hours/shifts. That doesn't lower the cost of living. Which is what largely influences the poverty rates.

Again look at New Hampshire. Look at California. Completely on opposite sides of the spectrum when it comes to employment, poverty, and wages.

Raising the wage will help some people but it is far from the best solution. Especially if it's raised federally.

An EITC is just a much better solution than wage increases. Subsidies, labor reform, etc are all much better solutions
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people just need to learn to work 12 hours a day
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What about the guy that was already making $15 an hour at a more skilled job but isnt getting by either?

Will he get more money?

gamer167 posted...

What about the guy that was already making $15 an hour at a more skilled job but isnt getting by either?

Will he get more money?

Why should that matter?
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ZMythos posted...

gamer167 posted...

What about the guy that was already making $15 an hour at a more skilled job but isnt getting by either?

Will he get more money?

Why should that matter?

Now youve got the unskilled guy making the same amount as the skilled guy. Skilled guy should make more as well.

Will employers be as apt to give skilled guy a raise now that they have to pay unskilled guy more?

You could also argue it gets rid of the incentive to pursue more strenuous/productive jobs if you can live just as comfortably with low skill jobs. Which then poses another threat. Over qualified people taking low skill jobs from those who need it most.
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I mean raising the minimum wage is only treating a symptom of a larger problem.

The real solution is to move to Universal Basic Income.
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gamer167 posted...

ZMythos posted...

gamer167 posted...

What about the guy that was already making $15 an hour at a more skilled job but isnt getting by either?

Will he get more money?

Why should that matter?

Now youve got the unskilled guy making the same amount as the skilled guy. Skilled guy should make more as well.

Will employers be as apt to give skilled guy a raise now that they have to pay unskilled guy more?

If the guy knows he can flip burgers for the same pay he would because it's an easier job that's stress free. Labor supply would decrease and employers would have to offer higher salaries to attract the workers.