A Congressional Budget Office (CBO) report, released Monday, found that a national $15 hourly minimum wage would likely increase pay for more than 15 million people and could cost between zero and 3.7 million jobs.
Within hours, several House Republicans had tweeted out the report’s worst-case scenario and suggested that gradually moving toward paying working Americans a livable wage was “socialism.”
The CBO is a non-partisan arm of Congress that works to make economic estimates and predictions about the economic and fiscal impact of legislation. It is currently run by Phillip Swagel, an economist who worked in President George W. Bush’s administration.
At the request of Rep. Steve Womack (R-AR) — the ranking minority party member on the House Budget Committee — CBO economists produced a report called “The Effects on Employment and Family Income of Increasing the Federal Minimum Wage.”
The report found that by raising the $7.25 per hour current minimum wage for most workers to $15 by 2025, the nation likely “would boost the wages of 17 million workers who would otherwise earn less than $15 per hour” and could also boost the wages for another 10 million workers who earn slightly above that amount.
The report’s median estimate was that “1.3 million other workers would become jobless,” and found a “two-thirds chance that the change in employment would be between about zero and a decrease of 3.7 million workers,” while 1.3 another million people would be lifted out of poverty.
It also noted, “Findings in the research literature about how changes in the federal minimum wage affect employment vary widely. Many studies have found little or no effect of minimum wages on employment, but many others have found substantial reductions in employment.”
Rather than acknowledging the nuance in a candid way, Womack and other House Republicans quickly moved to demagogue by highlighting only the worst-case scenario.
“This report confirms what we already knew about House Democrats’ Raise the Wage Act: American workers and families will lose their jobs if this bill is enacted,” Womack claimed in a statement. “CBO shows that imposing a 107% increase on the minimum wage could result in up to 3.7 million lost jobs – jobs hardworking Americans rely on to feed their families and pay their bills, jobs communities need to fuel their local economies, and jobs essential to strengthening our nation’s financial future.”
House Minority Leader Kevin McCarthy (R-CA) tweeted that the “Democrats’ minimum wage plan would erase up to 3.7 MILLION American jobs.”
In the next sentence, however, he dropped his caveat that this was the worst case scenario.
“To put the impact into perspective, the job loss of this minimum wage increase is nearly equivalent to eliminating all jobs added to the economy since November 2017,” McCarthy wrote in his tweeted statement, attacking the minimum wage increase proposal as “the new Democrat-socialists’ [sic] plan.”
House Minority Whip Steve Scalise (R-LA) also tweeted a similar attack, accusing Democrats of again putting “their socialist agenda above workers.”
🚨 New nonpartisan Congressional Budget Office report says a $15 minimum wage would ELIMINATE up to 3.7 MILLION JOBS.
Yet Democrats are about to again put their socialist agenda above workers & ram a reckless $15 minimum wage bill through the House. https://t.co/WGtqTAoIKW
— Steve Scalise (@SteveScalise) July 8, 2019
Rep. Paul Mitchell (R-MI) tweeted that the report “shows that raising the minimum wage to $15 does more harm than good and could cost as many as 3.7 million jobs in the United States.”
Rep. Kevin Brady (R-TX) tweeted that “forcing” a “damaging $15/hr minimum wage mandate” on local businesses would mean “up to 3.7 million jobs” lost and hurt families.
Rep. Doug LaMafla (R-CA) was even more blunt, falsely claiming the CBO had reported “raising the minimum wage would eliminate 1.3-3.7 million jobs,” ignoring the fact that the word “median” means there is an equal chance that such an increase would cost somewhere between no jobs and 1.3 million.
The nonpartisan Congressional Budget Office reports raising the minimum wage to $15 would eliminate 1.3-3.7 million jobs w/higher prices passed on to consumers.
This is a bad idea that would erase the positive momentum our economy has experienced lately.https://t.co/VcoCh10uWq
— Rep. Doug LaMalfa (@RepLaMalfa) July 9, 2019
But many studies have found that gradual increases to the minimum wage do not actually cost jobs. A January 2019 report published by the National Bureau of Economic Research, for example, examined 138 “prominent state-level minimum wage changes between 1979 and 2016” and found that “the overall number of low-wage jobs remained essentially unchanged over five years following the increase.”
A 2018 study by the Institute for Research on Labor and Employment at the University of California at Berkeley similarly detected “no significant negative employment effects” in several cities that had recently raised their minimum wages to more than $10 per hour.
As of Tuesday, 204 U.S. representatives (plus the non-voting delegates from the District of Columbia and the Northern Mariana Islands), all Democrats, have signed onto the Raise the Wage Act. The Senate companion version has 32 supporters, all members of the Senate Democratic caucus.
Despite inflation and the growing cost of living, the federal minimum wage has not been increased since July 2009.