House Democrats are including a $15 federal minimum wage in their coronavirus relief package, though questions remain over whether the increase can survive Senate consideration. The provision written into the House Education and Labor Committees’ portion of the bill Monday would increase the wage gradually from its current rate of $7.25 an hour to $15 in 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 over five years would lift 900,000 Americans out of poverty. The CBO found some 17 million people currently making below the minimum wage would be directly impacted while another ten million people whose wages are slightly above the minimum rate would also be affected.
At the same time, the CBO projected that raising the minimum wage to $15 per hour would result in 1.4 million fewer jobs. It also estimated the pay hike would increase the federal deficit by $54 billion over ten years, with higher spending on health care programs, unemployment, Social Security and more, while spending on programs such as food assistance would drop because more low-income families would no longer need to rely on them.
“The CBO’s report strengthens the case for gradually raising the minimum wage through the COVID-19 rescue package,” said House Education and Labor Committee Chairman Bobby Scott in a statement before it was released in his committee’s portion of the COVID relief bill. “This nonpartisan report shows that increasing the minimum wage will act as a direct and targeted stimulus for struggling workers and their families.”
Meanwhile, Senate Budget Committee Chairman Bernie Sanders has argued the only way to pass 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 budget. If that were the case, Senate Democrats would only need 51 votes for passage, rather than convincing 10 Republican Senators to join them.
“I find it hard 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 $15 minimum wage would increase the deficit by less than $1 million over ten years.”
At the same time however, Sanders said the “good news” was that the CBO report demonstrated that the $15 minimum wage increase would impact the budget and therefore could be done through reconciliation.
Amid debate over whether Democrats can use budget reconciliation to raise the minimum wage, it’s not clear Senate Democrats would have support from the full caucus. With a 50-50 split in the Senate, Democrats would not be able to lose a single vote, and Vice President Kamala Harris would likely need to vote to break the tie. Senator Joe Manchin said Monday he supports raising the minimum wage to $11 an hour.
“The states that are going to do $15, the states that should do $15, they’re already doing it. And more states will do $15, but the minimum wage shouldn’t be below the poverty guidelines,” Manchin said.
President Biden, about including the $15 minimum wage in the coronavirus relief bill said he “put it in, but I don’t think it’s going to survive.” He told O’Donnell that he would keep fighting for it in a stand-alone bill. Republicans do not favor the inclusion of the $15 minimum wage in the COVID-19 relief bill.
On Monday, White House press secretary Jen Psaki said Mr. Biden was referring to the Senate parliamentary process during his CBS News interview when he expressed doubt that it would remain in the Senate version of the bill.
“It’s still working its way through the process in Congress, and the parliamentarian still has to make a determination about what will be in the final package,” Psaki said, emphasizing that the president still believes in raising the minimum wage.
Psaki said they’ll “wait and see” what the parliamentarian says about passing a $15 wage increase through budget reconciliation.
As for the CBO report, Republicans seized on the estimated job losses and rise in costs.
“Non-partisan CBO says $15 minimum wage would cost 1.4 million jobs, far more than would benefit + raise costs in stores/for health care & increase the deficit by $54 billion,” tweeted Iowa Senator Chuck Grassley. “Including this harmful policy in COVID-relief bill would devastate same biz/ppl already hurt by pandemic.”
Alan He contributed reporting.
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