House Democrats include a $ 15 federal minimum wage in their coronavirus relief package, although questions remain as to whether the raise will survive Senate deliberations. A provision written in the House’s Education and Labor Committee on Monday will gradually raise wages from the current $ 7.25 hourly rate to $ 15 by 2025.
That comes after the Congressional Budget Office released a report on the same day that raising the minimum wage to $ 15 in five years would lift 900,000 Americans out of poverty. The CBO has found that it affects about 17 million people who are currently below the minimum wage, and this affects another tens of millions of people whose wages are slightly above the minimum wage.
However, the CBO predicts that raising the minimum wage to $ 15 an hour will result in 1.4 million fewer jobs. It has also been estimated that a pay rise will increase the federal deficit by $ 54 billion over ten years, spending on health programs, unemployment, social security and more, while spending on programs like food aid will fall because of more low income families no longer have to rely on them.
“The CBO report confirms the gradual increase in the minimum wage through the COVID-19 rescue package,” Bobby Scott, chairman of the House’s Education and Labor Committee, said in a statement before it was published as part of the committee’s draft COVID aid. “This non-partisan report shows that raising the minimum wage is a direct and targeted incentive for struggling workers and their families.”
Meanwhile, Senate Budget Committee Chairman Bernie Sanders argued that the only way to comply with the $ 15 minimum wage in the Senate would be to reconcile the budget, a process that can be applied when legislation has a direct impact on the federal budget. If that were the case, Senate Democrats would only need 51 votes to move forward, instead of convincing 10 Republican senators to join them.
“It’s hard for me to understand that the CBO has come to the conclusion that raising the minimum wage will increase the deficit by $ 54 billion,” Sanders said in a statement Monday. “Two years ago, the CBO concluded that a $ 15 minimum wage would increase the deficit by less than $ 1 million in ten years.”
Sanders, however, said the “good news” was that the CBO report showed that raising the minimum wage by $ 15 would have an impact on the budget, making it feasible through reconciliation.
Amid the debate over whether Democrats can use budget conciliation to raise the minimum wage, it is unclear whether Senate Democrats would receive support from the entire House of Representatives. In the 50-50 split in the Senate, Democrats could not lose a single vote, and Vice President Kamala Harris will likely have to vote to break the tie. Senator Joe Manchin said Monday he supports raising the minimum wage to $ 11 an hour.
“States that will pay $ 15, states that should pay $ 15 are already doing so. And more states are making $ 15, but the minimum wage cannot be lower under the poverty guidelines,” Manchin said.
President Biden said the inclusion of a $ 15 minimum wage in the coronavirus mitigation bill said he “put it in, but I don’t think he’ll survive.” He told O’Donnell that he was still fighting for it on his own account. Republicans do not support the inclusion of a $ 15 minimum wage in the COVID-19 aid bill.
White House spokesman Jen Psaki said Monday that Mr. Biden referred to the Senate parliamentary process in an interview with CBS News when he expressed doubts that it would remain in the Senate version of the law.
“The congressional process is still on its way and the MP still has to decide what will be in the final package,” Psaki said, stressing that the president still believes in raising the minimum wage.
Psaki said they would “wait and see” what the MP says about accepting the $ 15 wage increase through a budget negotiation.
As for the CBO report, Republicans insisted on the estimated loss of jobs and rising costs.
“The non-party CBO says the $ 15 minimum wage would cost 1.4 million jobs, far more than it would benefit + increase store / health care costs and increase the deficit by $ 54 billion,” said Iowa Senator Chuck Grassley. . “Including this harmful policy in the COVID mitigation bill would destroy the same biz / ppl that was already affected by the epidemic.”
Alan contributed comments.