Outlook for $15/hour minimum wage boosted by new govt. report

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WASHINGTON — The nonpartisan Congressional Budget Office in a report Monday found a gradual increase to a $15 federal minimum wage by 2025 would reduce poverty, add $54 billion to the deficit over a decade and increase pay for millions of low-income workers.

The report could help Democrats make a strong case for including a gradual federal minimum wage increase in the $1.9 trillion relief package put forth by the Biden administration. 

The reconciliation process allows legislation to pass on a simple majority vote in the Senate if it affects the federal deficit, and the CBO analysis found the minimum wage increase does that.

The report said that 900,000 people would be lifted out of poverty and 17 million would experience a wage increase under the pay boost. In the United States, about 38 million people live in poverty.

Reliance on federal social programs such as nutrition programs would decrease, but the demand for programs such as unemployment benefits would increase, as the report found that 1.4 million jobs would be cut.

1.2M Michigan workers would see a raise under minimum wage bill

House Education and Labor Chair Bobby Scott (D-Va.) said in a statement that Monday’s report strengthens the case for gradually increasing the minimum wage in the COVID-19 stimulus package.

The current federal minimum wage is $7.25 and the last time it was raised was in 2009, from $6.55 to $7.25.

“This nonpartisan report shows that increasing the minimum wage will act as a direct and targeted stimulus for struggling workers and their families,” he said.

“At a time when many of our essential workers are still not being paid enough to provide for themselves and their families, we must do everything in our power to give these workers a long overdue raise.”

The Biden administration has pushed for a minimum wage hike in its $1.9 trillion stimulus coronavirus relief package, though the Senate passed a messaging amendment in its debate on the budget resolution barring an increase during a global pandemic.

More bad COVID-19 news: Michigan unlikely to see a minimum wage hike

And not all Democrats agree with the increase.

Sen. Joe Manchin (D-W.Va.) a key vote in a Senate split 50-50, has said that he doesn’t support a $15 minimum wage. The minimum wage in West Virginia is currently $9.50 an hour and will go up to $10.25 this year.

Currently, 29 states and the District of Columbia have a higher minimum wage than the current federal wage, including Michigan, which is $9.65 per hour.

A report from the Economic Policy Institute, a Washington, D.C.-based think tank, found that the legislation would mean about 1.24 million of the state’s lowest-paid workers would receive an extra $3,157 per year, on average. That 1.24 million represents about 28% of all Michigan workers.

Florida recently passed an amendment that would increase the state’s minimum wage to $15 an hour by 2026. Five states that don’t have a state minimum wage include Alabama, Louisiana, Mississippi, South Carolina and Tennessee.

Advance Editor Susan J. Demas contributed to this story.

Ariana Figueroa
Ariana covers the nation's capital for States Newsroom. Her areas of coverage include politics and policy, lobbying, elections and campaign finance. Before joining States Newsroom, Ariana covered public health and chemical policy on Capitol Hill for E&E News. As a Florida native, she's worked for the Miami Herald and her hometown paper, the Tampa Bay Times. Her work has also appeared in the Chicago Tribune and NPR. She is a graduate of the University of Florida.