Democrats are pushing for a $15 minimum wage in the coronavirus relief bill, which the Congressional Budget Office says will help 900.000 Americans but cut 1.4 million jobs. Biden admits the proposal is unlikely to survive negotiations.
Summary
Included in President Joe Biden’s coronavirus relief proposal was a provision to increase the federal minimum wage to $15 an hour.
- As the bill is winding its way through Congress, the Congressional Budget Office released a report on the effect of hiking the minimum wage, saying it would increase the deficit by $54 billion.
- According to the CBO report, raising the minimum wage would lift 900,000 Americans out of poverty but cut nearly a million and a half jobs.
- Small business advocates have been sounding the alarm that hiking the minimum wage will disproportionately affect smaller companies, with an NFIB rep sayings “big business may be fine with a dramatic increase” of the minimum wage, but the policy would “make it even harder” for small shops to compete.
- “Republicans seized” (a common trope used by mainstream media) on the report, with Politico quoting Representative Virginia Foxx as saying the wage hike “paints a dire picture for workers and small businesses.”
- Biden has conceded that the measure to increase the minimum wage is unlikely to survive during negotiations over the legislation.
- Vox’s report on the latest coronavirus relief ignored the budgetary and workforce effect a minimum wage hike would have, instead focusing on Biden’s expectations that it will not make it into the final bill and emphasizing his willingness to work on the issue outside of coronavirus relief.
- Washington Post fact-checkers took a look at Biden’s claims and analyze the CBO report, ultimately concluding that the trade-offs should be considered acceptable but that Biden engaged in the “tendency by politicians to oversell their policy proposals.”
- Democrat Senator Joe Manchin of West Virginia is one of the few voices on the left raising concerns about the minimum wage increase, but NBC News painted resistance to the proposal as Republican opposition.
- Republican Governor Greg Abbott of Texas criticized the wage proposal, highlighted in Fox Business’ coverage, by saying “a government-imposed $15 minimum wage would put a boot on the neck of small businesses.”
- The Wall Street Journal analyzed the numbers the CBO reported, and noted that the budgetary impact is mostly due to increased prices contributing to increased federal spending, but that unemployment and health-care program spending would increase as a result of job loss.
- Newsmax’s report quoted Vermont Senator Bernie Sanders, who “took issue with the CBO report”, saying it was difficult to understand the deficit increase expectation given a completely different finding to a similar proposal last Congress.
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© Dallas Gerber, 2021
