The Congressional Budget Office estimates that a $15 federal minimum wage increase as proposed by Democrats would cost 1.4 million jobs by 2025 but lift 900,000 people out of poverty.
It would also increase the federal deficit by $54 billion over a decade, drive prices higher for goods and services and increase wages for 17 million workers who currently make less than $15 an hour.
The CBO, a nonpartisan federal agency that analyzes the effects of proposed fiscal policies, published its report Monday. The federal minimum wage has been $7.25 since 2009.
President Joe Biden campaigned on a promise to raise the minimum wage, though he told CBS Sunday he didn’t think the bill would survive the COVID-19 relief talks.
“I’m prepared as the president of the United States on a separate negotiation on minimum wage to work my way up from what it is now,” Biden said. “No one should work 40 hours a week and live below the poverty wage and you’re making less than $15 an hour, you’re living below the poverty wage.”
Vermont Sen. Bernie Sanders, chair of the Senate Budget Committee and a fierce advocate of the increase, took issue with the CBO report.
"I find it hard to understand how the CBO concluded that raising the minimum wage would increase the deficit by $54 billion," he tweeted. "Two years ago, CBO concluded that a $15 minimum wage would increase the deficit by less than $1 million over ten years."
"The good news, however, is that from a Byrd Rule perspective, the CBO has demonstrated that increasing the minimum wage would have a direct and substantial impact on the federal budget," he added.
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