Michael Hiltzik: A strong endorsement of the $15 minimum wage from the Congressional Budget Office

Michael Hiltzik, Los Angeles Times on

Published in Business News

The Congressional Budget Office, that nonpartisan arbiter of the impacts of federal legislation, reports that raising the federal minimum wage to $15 an hour would increase the wages of 27 million Americans and lift 1.3 million out of poverty as of 2025.

The CBO also says that the change might cost jobs for 1.3 million workers, though that's the squishiest part of the agency's analysis. Overall, the CBO says, "For most low-wage workers, earnings and family income would increase, which would lift some families out of poverty."

The analysis, which was released Monday, is especially timely because House Democrats are on the verge of bringing a minimum wage raise to the floor for a vote. The Raise the Wage Act, introduced in January by Rep. Bobby Scott (D-Va.), would increase the federal minimum to $15 an hour from the current $7.25 in stages over five years.

Worker advocates say the increase is long overdue. The federal minimum wage hasn't been increased since July 2009. Accounting for inflation it peaked in 1968, when its nominal value was $1.60, the equivalent of $9.42 today by the CBO's reckoning.

By that standard, the federal government has fallen way behind most states. As the CBO observes, 29 states and the District of Columbia now have a minimum wage higher than the federal minimum. (In those states, the higher rate applies.) The CBO points out that the minimum wage is inflation-indexed in 17 of those states. In some municipalities, the minimum wage is even higher than their state level -- in San Francisco, the minimum increased to $15.59 per hour on July 1, while the California statewide rate is $12.

The CBO also reports that "about 60% of all workers currently live in states where the applicable minimum wage is more than $7.25 per hour."


These figures give the lie to the Trump administration's opposition to the minimum wage increase. As we reported in May, that opposition was expressed by Labor Secretary Alex Acosta, who explained fatuously to a congressional committee that raising the federal minimum would be tantamount to allowing the 29 states that have raised their minimums above the federal level to "impose their cost structures on the remaining 21 states."

Acosta's solicitude for those 21 laggards should be weighed against the fact that today's federal minimum wage is close to a historical nadir for the U.S. It's now about one-third of the median full-time wage, or the lowest in the industrialized world, where the level tends to be 50% to 60% of the median wage.

(Acosta's days as chief underminer of worker benefits in the Trump administration may be numbered, thanks to his role as a former federal prosecutor in arranging a wrist-slap plea deal in 2008 for accused sex trafficker Jeffery Epstein; victim rights advocates and many Democrats are calling for him to be fired.)

The CBO's latest analysis makes clear that the benefits of a $15 minimum wage would heavily outweigh the downside. The ratio of those who would experience a higher wage vs. those who would lose their jobs or hours is about 21 to 1 (27.3 million winners, 1.3 million losers). The net gain for all workers would be $44 billion.


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