A study released on Monday by the nonpartisan Congressional Budget Office (CBO) indicated the possible elimination of 1.3 million jobs by 2025 if the Democrats’ $15 minimum wage bill is enacted.
In the report, the CBO examined three options at $10, $12 and $15 for increasing the federal minimum wage and pointed out the $15 option would have the largest effects on employment and family income in a variety of ways.
“There is about a two-thirds chance that the change in employment would lie between about zero and reduction of 3.7 million workers,” and “would reduce total real (inflation-adjusted) family income in 2025 by $9 billion, or 0.1 percent,” the CBO estimated.
The CBO also predicted the bill would move an estimated 1.3 million Americans out of poverty but affect the overall economy such as making many less skilled workers unemployable, increasing higher labor costs and prices for goods.
The federal minimum wage of $7.25 per hour has not changed since 2009.
The bill of House Democrats introduced in January by Rep. Bobby Scott (D-Va.) was to showcase the party’s policy priorities going into the 2020 election. Many politicians, economists, and local businesses have opposed the proposal.
At the start of 2019, New York City hiked its minimum wage for the third time in three years and its small business owners are struggling to adapt to the increased labor costs by hiking prices, cutting jobs, cutting training hours, and tightening hiring standards.
The bill could pass the House but the GOP-held Senate will likely not take it up.
“The House majority should be looking for ways to continue growing our booming economy by empowering employers to create even more opportunity for people across the country”, said the ranking member of the House Budget Committee, Rep. Steve Womack (R-Ark.).
He continued, “I urge House Democrats not to advance a proposal that would unravel that progress and hurt millions of families in the process.”