House Democrats are including a $ 15 federal minimum wage in their coronavirus aid package, although the question remains whether the increase can survive Senate consideration. The provision written into the House Education and Labor Committees section of the bill on Monday would gradually increase wages from the current rate of $ 7.25 an hour to $ 15 by 2025.
This comes after the Congressional Budget Office released a report the same day that estimates that raising the minimum wage to $ 15 an hour for five years would lift 900,000 Americans out of poverty. The CBO found that about 17 million people currently earning below the minimum wage would be directly affected, while an additional ten million people whose wages are slightly above the minimum wage would also be affected.
At the same time, the CBO predicted that raising the minimum wage to $ 15 an hour would result in 1.4 million fewer jobs. It also estimated that the wage hike would increase the federal deficit by $ 54 billion over a decade, with higher spending on health care programs, unemployment, Social Security and more, while spending on programs like food aid would drop as more low-income families no longer have to rely on them.
“The CBO report reinforces the arguments for gradually increasing the minimum wage through the COVID-19 bailout package,” said Education and Labor Committee Chair Bobby Scott in a statement before it was released in the US. part of the COVID bill. “This unbiased report shows that raising the minimum wage will act as a direct and targeted incentive for troubled workers and their families.”
Meanwhile, Senate Budget Committee Chair Bernie Sanders has argued that the only way to meet the $ 15 minimum wage in the Senate would be through budget reconciliation, a process that can be used when the legislation has a direct impact on the federal government. budget. If that were the case, Senate Democrats would only need 51 votes for passage, instead of convincing 10 Republican senators to join them.
“I find it difficult to understand how the CBO concluded that raising the minimum wage would increase the deficit by $ 54 billion,” Sanders said in a statement Monday. “Two years ago, CBO concluded that a minimum wage of $ 15 would increase the deficit by less than $ 1 million in ten years.”
At the same time, however, Sanders said the “good news” was that the CBO report showed that the $ 15 minimum wage increase would have an impact on the budget and therefore could be achieved through reconciliation.
Amid the debate about whether Democrats can use budget reconciliation to raise the minimum wage, it’s not clear that Senate Democrats would get backing from the full caucus. With a 50-50 split in the Senate, Democrats wouldn’t be able to lose a vote, and Vice President Kamala Harris would likely have to vote to break the tie. Senator Joe Manchin said on Monday that he is in favor of raising the minimum wage to $ 11 an hour.
“The states that are going to do $ 15, the states that should be doing $ 15, they are already doing it. And more states are going to be doing $ 15, but the minimum wage cannot be lower than the poverty guidelines,” Manchin said.
President Biden, on including the $ 15 minimum wage in the coronavirus bill, said he “ put it in, but I don’t think it will survive. ” He told O’Donnell he would continue to fight for it in a standalone bill. Republicans are not in favor of the inclusion of the $ 15 minimum wage in the COVID-19 bill.
On Monday, White House press secretary Jen Psaki said that Mr. Biden was referring to the Senate parliamentary process during his CBS News interview, when he expressed doubts whether it would remain in the Senate version of the bill.
“It is still working through the process in Congress, and the MP has yet to decide what will be in the final package,” Psaki said, stressing that the president still believes in an increase in the minimum wage.
Psaki said they will “wait and see” what the MP says about passing on a $ 15 pay rise through budget reconciliation.
As for the CBO report, Republicans took advantage of the estimated job losses and the rise in costs.
“The impartial CBO says the $ 15 minimum wage would cost 1.4 million jobs, far more than increase in-store / health care benefits and costs and increase the deficit by $ 54 billion,” Senator Chuck tweeted. Grassley of Iowa. “Including this harmful policy in the COVID bill would devastate the same company already hurt by a pandemic.”
Alan He contributed to the reporting.